Inventories reach bottom, market begins improving

Imports declined again in December, to 1.98 million tons, based on preliminary reporting. ‘Imports plummeted in December by 15% from November’s low level and by 34.3% compared to December 2006,’ reported David Phelps, president, AIIS. For the year the decline from record 2006 levels was 26.6%.

‘Overall, 2007 was an average year for total imports at 33.2 million tons, but all the good news came in the first half, with the second half reductions reflecting high inventories, the weakening dollar, more attractive steel prices in other markets and high freight rates. The good news for steel importers is that by December, inventories had reached the bottom, prices began to improve and there is a hope that freight rates may moderate,’ added Phelps.

‘It is clear that the US steel market is robust in early 2008 with rapidly increasing prices and a general view that the domestic industry will fare well in the first half. We expect that import ordering will improve slowly during the first half. However, fears of a recession leave us with uncertain market conditions for the second half of 2008,’ concluded Phelps.

Total Steel imports in December 2007 were 1.976 million tons compared to 2.322 million tons in November 2007, a 14.9% decrease, and a 34.3% decrease compared to December 2006. For year-to-date figures, imports decreased 26.6% compared to 2006 or from 45.3 million tons in 2006 to 33.2 million tons in 2007. The data show that imported semifinished products decreased by 27.3% in December 2007 as compared to December 2006. For the year-to-date period, semifinished imports decreased from 9.32 million tons in 2006 to 6.66 million tons in 2007, a 28.6% decrease, based on preliminary reporting.