Steel imports have dropped 9% in 2008

By Tom Stundza -- Purchasing, 3/26/2008 9:31:00 AM

Steel imports dropped 8.3% in February to 2.43 million net tons so that two-month imports of 5.07 million net tons are 9% lower than the offshore tonnage bought in the first two months of 2007. The overall decline in steel imports is helping keep domestic market price high and creating some regional supply shortages, according to William E. Gaskin, president of the Precision Metalforming Association.

Purchasingdata.com surveys find that only 19% of the buyers in January and February were planning to increase sourcing of foreign-made metals, including steel. Most of that is because the cost of foreign steel and other metals is even higher than spiking U.S. market prices. Also, in the face of a weak dollar, foreign mills are unwilling to ship as many tons of metals here as in the past.

“Steel prices remain high and inventory levels remain low,” says Gaskin, whose trade group represents 1,200 metalworking companies. “Spot shortages, which we have not seen much of since 2004, have been reported in parts of the country.” In a press statement, he adds: “As long as prices continue to rise and inventories continue to drop, the chances of more shortages will only go up.”

Commerce Department trade data shows that imports of hot-rolled sheet rose by 3% from January, to almost 251,000 tons in February but cold-rolled sheet imports decreased 6% percent to less than 202,000 tons. Steel imports from China dropped to just under 236,000 tons in February, down 14% from January and down 29% from a year ago. China dropped behind Canada (665,000 tons) and Mexico (320,000 tons) as the leading foreign sources of steel.