Steel Industry Executive Summary: July 2016

Transcription

1 Steel Industry Executive Summary: July 2016 Highlights From April to May 2016, U.S. imports of steel mill products increased 15.8% to 2.6 million metric tons from 2.2 million metric tons In May 2016, the steel trade deficit widened to -1.9 million metric tons from -1.5 million metric tons in April 2016, a 22.7% increase. U.S. steel production increased by 3.8% to 6.8 million metric tons in May 2016 from 6.6 million metric tons in April. Table of Contents Trade U.S. Imports of Steel Mill Products... 2 Trade U.S. Trade Balance in Steel Mill Products... 4 Trade China... 4 Trade NAFTA... 7 Trade Steel Import Changes by Country and Product... 8 Prices... 9 Production & Capacity Utilization Demand Trade Remedy Case Determinations May/June Industry Status SIMA Team Contact Information List of Figures Figure 1 U.S. Imports of All Steel Mill Products from World... 2 Figure 2 U.S. Imports of Steel Mill Products by Partner... 3 Figure 3 U.S. Imports of Steel Mill Products by Product Category... 3 Figure 4 U.S. Imports/Exports of Steel Mill Products... 4 Figure 5 U.S. Imports of All Steel Mill Products from China... 5 Figure 6 China's Imports/Exports of Steel Mill Products... 6 Figure 7 Chinese Exports of Steel Mill Products by Partner... 7 Figure 8 NAFTA Steel Mill Imports by Top Partner Country... 8 Figure 9 U.S. Domestic Steel Prices... 9 Figure 10 Monthly U.S. Crude Steel Production Figure 11 Monthly World Crude Steel Production Figure 12 Monthly Crude Steel Production - Major Producers Figure 13 Share of World Crude Steel Production Figure 14 U.S. Domestic Steel Capacity Utilization Figure 15 U.S. Apparent Consumption of Steel Mill Products Figure 16 Import Penetration for All Steel Mill Products Figure 17 U.S. Steel Industry: Quarterly Net Income Figure 18 Steel Stocks vs. S&P 500, Quarterly Average Share Price Activity

2 Trade U.S. Imports of Steel Mill Products From April to May 2016, U.S. imports of steel mill products increased 15.8% to 2.6 million metric tons from 2.2 million metric tons. o May 2016 steel imports were down 15.3% from May 2015 and down 10.9% from the 2015 average monthly volume of 2.93 million metric tons. o Steel mill imports in May were down 35.2% from the most recent high import volume peak in October Figure 1 U.S. Imports of All Steel Mill Products from World In year-to-date 2016, U.S. imports of steel mill products have amounted to 11.7 million metric tons, a 30.8% decrease from 16.9 million metric tons in YTD o In value terms, year-to-date imports have shown a larger decrease than by tonnage, declining by 44.1% to $8.7 million in 2016 from $15.5 million in o Canada accounted for the largest share of U.S. imports by partner country thus far in 2016 at 19%, followed by Brazil (14%) and Korea (12%). o The U.S. has imported 4.9 million metric tons of flat products in YTD 2016, accounting for 42% of total steel mill imports, followed by long products at 2.9 million metric tons or 25% of total imports. 2

3 Figure 2 U.S. Imports of Steel Mill Products by Partner Figure 3 U.S. Imports of Steel Mill Products by Product Category 3

4 Trade U.S. Trade Balance in Steel Mill Products U.S. imports of steel mill products have steadily declined in the past year, while exports have remained relatively flat. In May 2016, however, the steel trade deficit widened to -1.9 million metric tons from -1.5 million metric tons in April 2016, a 22.7% increase. o Compared to the trade balance one year ago, the May 2016 steel trade gap has narrowed by 18%. o From April to May 2016, the volume of U.S. steel exports increased by 1% to 729 thousand metric tons. May 2016 exports were down 7.7% from one year ago and down 31% from three years ago. o Imports increased 15.8% by volume between April and May 2016 to 2.6 million metric tons. May 2016 imports were down 15.4% from one year ago and up 1.3% from three years ago. Trade China Figure 4 U.S. Imports/Exports of Steel Mill Products In May 2016, steel mill imports from China increased 7.3% to 67.2 thousand metric tons from 62.6 thousand metric tons in April. o May 2016 imports from China were down 75.5% from one year ago and down 62.7% from the 2015 monthly average. o May 2016 imports from China represented just 3% of all U.S. steel mill imports, up from 2.7 % in April. 4

5 Figure 5 U.S. Imports of All Steel Mill Products from China China s steel mill imports decreased while exports increased between April and May 2016, with China s steel trade surplus widening by 5.2% to 8.1 million metric tons. o In May 2016, Chinese exports increased 3.9% to 9.2 million metric tons from 8.9 million metric tons in April. May 2016 exports were up 2.5% from exports one year ago and up 77.5% from three years ago. o From April to May 2016, Chinese imports decreased 4.4% to 1.1 million metric tons. China s steel imports in May 2016 were up 1.9% from imports one year ago and down 15.7% compared to three years ago. 5

6 Figure 6 China's Imports/Exports of Steel Mill Products The volume of Chinese steel mill exports increased by 6.8% to 45.4 million metric tons in YTD 2016 from 42.5 million metric tons in YTD 2015 (through May). o The United States received the 28 th largest share of Chinese steel exports at 0.74%, or 338 thousand metric tons in YTD 2016, a decrease of 70.4% over YTD o South Korea received the largest share of Chinese steel exports at 5.6 million metric tons in YTD 2016, an increase of 3.6% from YTD o Notable increases between YTD 2015 and YTD 2016 included exports to Saudi Arabia (up 84.8%), Thailand (up 73.3%), and Pakistan (up 54.3%). 6

7 Figure 7 Chinese Exports of Steel Mill Products by Partner Trade NAFTA According to the latest available data from the three NAFTA countries, total steel mill imports into NAFTA countries increased 10.3% to 11 million metric tons between February and March o March 2016 steel mill imports into NAFTA countries were down 30.4% from one year ago. o Intra-NAFTA steel imports decreased 0.1% to 1.4 million metric tons between February and March, while external NAFTA imports increased 17.7% to 2.3 million metric tons. o Imports among NAFTA countries accounted for a 38% share of total imports into NAFTA countries in YTD 2016 (through March), with Korea s share following at 11% or 1.1 million metric tons and Japan s share at 9% or 941 thousand metric tons. 7

8 Figure 8 NAFTA Steel Mill Imports by Top Partner Country Trade Steel Import Changes by Country and Product Country Product Average monthly quantity Apr June 2016 (metric tons) Average monthly quantity July March 2016 (metric tons) Percent change from Historic to Current average quantity NOTABLE INCREASES RUSSIA Bars-Reinforcing -- C & A 6, % RUSSIA Oil Country Goods -- C & A 13,709 1, % WORLD Blooms, Billets and Slabs -- S 37,725 8, % TURKEY Plates Cut Lengths C & A 5,503 1, % GERMANY Sheets & Strip Galv Electrolyt -- C & A 5,028 1, % SWEDEN Plates in Coils C & A 5,258 2, % VIETNAM Sheets & Strip Galv Hot Dipped -- C & A 18,819 8, % KOREA Plates Cut Lengths C & A 44,399 21, % JAPAN Bars-Reinforcing -- C & A 33,652 16, % NOTABLE DECREASES 8

9 JAPAN Rails Standard C & A 7,114 19,064 63% SOURCE: U.S. Department of Commerce, Enforcement and Compliance, SIMA Table last modified July 11, 2016, with Licensing data collected through June 2016 and Final Census data through May A notable change is defined here by a significant decrease in the current three month average quantity over the previous nine months average quantity; the program examines the largest importers within each product group. Steel mill categories are defined by 10-digit HTS codes. Prices Benchmark domestic steel prices increased in June 2016 after steady declines in o U.S. domestic prices for hot-rolled band increased to $691 per metric ton in June Compared to one year ago, the price for hot-rolled band was up 34.7 percent. o Cold-rolled coil prices increased to $897 per metric ton in June, a 38.6 percent increase from last year, while standard plate prices increased to $721 per metric ton, a 15.5 percent increase from a year ago. Figure 9 -- U.S. Domestic Steel Prices 9

10 Production & Capacity Utilization According to data from the World Steel Association, U.S. steel production increased by 3.8% to 6.8 million metric tons in May 2016 from 6.6 million metric tons in April. This marks a 0.4% decrease from the May 2015 production level. Total U.S. steel production for 2015 decreased to 78.9 million metrics tons from 88.2 million metric tons in 2014, a 10.5% negative change. Figure 10 Monthly U.S. Crude Steel Production Global steel production increased 3.1% to 139 million metric tons in May 2016 from million metric tons in April. o Global production in May decreased by 0.1% from one year ago. o Total world crude steel production decreased to 1.62 billion metric tons in 2015, down 2.8% from the reported 2014 level of 1.67 billion metric tons. o China s May 2016 production level increased 1.6% to 70.5 million metric tons from 69.4 million metric tons in April. Annual total production in China for 2015 amounted to million metric tons, a 2.3% decrease from the previous year. o The European Union 28 remains the second largest producer, behind China, with a May 2016 production level of 14.5 million metric tons, a 7.3% increase from April. 10

11 Figure 11 Monthly World Crude Steel Production Figure 12 Monthly Crude Steel Production - Major Producers 11

12 China s share of total monthly world steel production decreased slightly from 51.5% to 50.7% between April and May 2016, accounting for roughly half of monthly total world production, while the U.S. ranked fifth behind India at 5%. China s share is larger than the combined production of the U.S., the EU 28, Russia, and Japan, which historically were the largest producers of steel. Figure 13 Share of World Crude Steel Production U.S. domestic capacity utilization continued its slight recovery after sliding downwards in recent months and hitting a 6-year low. o In May 2016, capacity utilization was estimated at 74.3%, an increase from 72.6% in April. o Capacity utilization in May 2016 was up 3% from one year ago and up 2.2% from five years ago. o Overall capacity utilization in 2015 averaged 70.1%, a 9.5% drop from 77.5% in 2014 and has averaged 72.2% in YTD 2016, a slight increase from 71.6% in YTD o Though capacity utilization has increased 73.6% from the twelve year low reached in May 2009, it still remains well below the pre-recession historical averages. 12

13 Figure 14 U.S. Domestic Steel Capacity Utilization Demand Apparent consumption (used to measure domestic demand) for steel, excluding semi-finished products, increased 3.7% to 8.1 million metric tons in May 2016 from 7.8 million metric tons in April. o May 2016 demand has decreased 1.2% from one year ago and increased 8.5% from five years ago. o Demand in May 2016 was still 96.7% higher than April 2009, when steel demand was at its lowest level in recent years. 13

14 Figure 15 U.S. Apparent Consumption of Steel Mill Products Import penetration for steel mill products, excluding semi-finished products, decreased slightly to 23.3% in May 2016 from 23.7% in April. This marks a 23.2% decrease over the import penetration level from one year ago. Figure 16 Import Penetration for All Steel Mill Products 14

15 Trade Remedy Case Determinations June/July 2016 Informal tracking of anti-dumping and countervailing duty case initiations, investigations, and orders applicable to steel products. Trade Remedies undertaken by the U.S. Product Country Department of Commerce Finding Certain Cold-Rolled Steel Flat Japan Antidumping Duty Order Issued Products Certain Cold-Rolled Steel Flat China Antidumping Duty Order Issued Products Certain Cold-Rolled Steel Flat China Countervailing Duty Order Issued Products Circular Welded Carbon-Quality Steel Pipe Pakistan Affirmative Preliminary Antidumping Duty Determination Circular Welded Carbon-Quality Steel Pipe Oman Affirmative Preliminary Antidumping Duty Determination Circular Welded Carbon-Quality Steel Pipe United Arab Emirates Affirmative Preliminary Antidumping Duty Determination Circular Welded Carbon-Quality Steel Pipe Vietnam Affirmative Preliminary Antidumping Duty Determination SOURCE: US Department of Commerce, Enforcement and Compliance. Factsheets available at Industry Status The U.S. steel industry, as represented in the chart below, posted a combined net loss of $233 million in Q o According to publicly available figures, three of the six companies included reported quarterly net gains while three reported net losses. o Nucor reported the highest quarterly net profit at $70.8 million, followed by Steel Dynamics at $63 million and Commercial Metals at $10.5 million. o U.S. Steel posted a net loss of $340 million, followed by Carpenter Technology posting a $23.9 million loss and AK Steel with a $13.6 million loss. o Since Q1 2009, the group of steel companies monitored in the below chart has collectively reported net earnings for 15 quarters. The group s aggregate quarterly figures are significantly below performance levels from 2004 to early to mid o The net income chart includes AK Steel, Carpenter Technology, Commercial Metals Company, Nucor, Steel Dynamics, and U.S. Steel. 15

16 Figure 17 U.S. Steel Industry: Quarterly Net Income Q average share prices decreased from Q average share prices for the majority of charted steel stocks. o Of the charted steel stocks, ArcelorMittal average share prices saw the largest decline from the previous quarter at 23.7%. Nucor average share prices decreased by 1% and U.S. Steel saw a 0.7% decrease from Q4. o AK Steel and Steel Dynamics were the only two to see increases in average share prices between Q and Q1 2016, increasing by 13.1% and 5%, respectively. o Compared to the same quarter last year, all the charted steel stocks except Steel Dynamics showed significant decreases in average share prices, with ArcelorMittal decreasing by 62% and U.S. Steel by 58.7%. o Only ArcelorMittal underperformed relative to the S&P 500 during the period of Q to Q o The stock chart monitors the trends of S&P 500, US Steel, Nucor, Steel Dynamics, AK Steel, and ArcelorMittal quarterly share prices as indexed to average share prices in Q The S&P 500 trend line serves as a basis upon which to compare the performance and relative movement of the U.S. steel industry (via stocks) to the broader U.S. market. 16

17 Figure 18 Steel Stocks vs. S&P 500, Quarterly Average Share Price Activity SIMA Team Contact Information Enforcement and Compliance Office of Policy th P 14P & Constitution Ave., NW, Suite Washington, DC Phone: (202) Fax: (202) [email protected] 17