Despite some mixed views, 2016 so far has been a better year for domestic steel than 2015, judging by where several leading indicators – including production, prices,shipments and trade issues – have moved or may be moving the sector.

1. U.S. Raw Steel Production (Through May, 2013-2016)
Despite some mixed views, 2016 so far has been a better year for domestic steel
than 2015, judging by where several leading indicators – including production, prices,
shipments and trade issues – have moved or may be moving the sector.
Raw steel production numbers are stable this year, an improvement over 2015’s decreases.
While output has been relatively steady – a relief from last year’s falling numbers –
steel prices have risen dramatically this year. There is some concern currently,
however, that they may have crested for now.
Source: American Iron and Steel Institute
Source: AMM
Source: Metals Service Center Institute
Source: American Iron and Steel Institute
Source: U.S. Department of Commerce, Enforcement and Complaince
U.S. Steel Shipments by Market Classification
U.S. Imports of Finished Steel Products
Recycling Rates of Select Products in Percentages
Back home, the overall recycling rate of steel is 86 percent based on the most recent data
compiled by the Steel Recycling Institute (SRI).
Along with a hike in steel prices has come an increase in raw
material costs, especially from ferrous scrap.
Source: Steel Recycling Institute
Source: AMM
Steel Prices vs. Ferrous Scrap
2016 Sees Steel
Strengthen
in million tonnes
in million tonnes
in million tonnes
US Dollars per tonne
Hot-rolled sheet (HRC)
US domestic Midwest
SteelBenchmarker USA cold rolled
coil East of the Mississippi
26
34
31
27*
25
2016201520142013
*estimate for 2016 based on imports through April
20162015
3.05
3.18
3.33
3.25
3.36
3.52
3.33
3.67
3.47
3.28
Automobiles Appliances Steel containers Structural steel Construction
reinforcement
steel
Hot-rolled sheet (HRC) US
domestic Midwest
SteelBenchmarker USA cold rolled coil
East of the Mississippi
No. 1 busheling scrap
consumer buying price
95% 88% 70% 98% 71%
Select Steel Prices, December 2015-June 2016
There is a gap developing between demand and the higher prices. For example, steel
shipments from service centers are down by month when compared to 2015.
U.S. Service Center Shipments, 2015 v. 2016
When the steel does ship, where does the it go? Construction remains the top destination
for steel products, followed by automotive end-users.
Yet some of those markets also are taken at least in part by foreign steel products.
However, finished steel imports to date this year are on a pace to be much lower than 2015.
Trade Winds
A major reason for that trend is the trade relief sought
by a number of domestic steel producers:
January February March April May
© 2016 American Metal Market
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the overall recycling rate of steel is
86%
2012 2013 2014 2015 2016
Section 201
In recent months a number of steel
executives have called for drastic
government-initiated action,
such as a Section 201 trade
case challenge that can lead
to blanket import bans.
Section 232
Talk of a Section 232 filing under
the Trade Expansion Act of
1962 is a new development; it
is a provision that gives the
U.S. President the power to
adjust imports if they
threaten to affect U.S.
national security. It has
not been used since the
Reagan Administration.
Section 337
Pittsburgh-based U.S. Steel, in late April filed a
Section 337 trade complaint targeting Chinese
steel imports, claiming in part that a Chinese
steelmaker had stolen trade secrets. If
successful, the complaint would block all
steel imports from some of China’s
largest producers.
556
584.60
599.25
$617
$811.75
$874$705.47
$665.24
$452.49
$440.92
$422.27
$395.73
$689.40
$529.10
39.69 39.5
37.31 37.02
42%
Construction
9%
Machinery &
Equipment
4% Container
5%
Appliances
7%
Energy
3%
3%Other
27%
Automotive National
Defense
Dec-15 Mar-16 April-16 May-16 June-16Feb-16Jan-16
$617
$599.25
$584.60
$556
$395.73
$874
$811.75
$689.40
$529.10
$166.62
$705.47
$665.24
$422.27
$280.08
$440.92 $452.49
$249.60
$198.80
$280.08
$186.94
$186.94
Dec-15
Jan-16
Feb-16
Mar-16
Apr-16
May-16
Jun-16