The US Steel Industry Set for Gloomier Days
The US Steel industry is all set for worse days ahead due to high imports of steel from Russia & China, is on the rise. Domestic steel makers are left with no choice by slashing the prices to cope up the competition from Imports. Strengthening Dollar value is forcing to put off the profit margins and reducing the costs for the buyers of steel, including the auto manufacturers.
Imports have risen to 33% in January compared with the previous year, according to the stats released by the American Iron & Steel Institute, touching 3.85 million tons a year compared to 2.9 million tons previous year. The rise in imports comes as a result of Oil & Gas drillers cancelling the orders for steel pipes, emphasizing the importance of overall demand in the US when compared with other markets.
Increasing dollar value is making the imported steel to be inexpensive by comparison, leaving the domestic manufacturers to struggle. Imports of steel are already set for a record high in 2014, Imports from Russia rose to 96% in 2014 to 6.5 million tons, while imports from China rose 69% to 2.8 million tons.
Steel makers with major operations in the US like ArcelorMittal, US Steel Corporation and the Nucor Corporation have cut the rates as much as 17% costing $500 a ton comparable to 2009 market rates. Many manufacturers are hoping the price cut would increase the demand domestically as well as allow less imports flowing into the country. But, Industry experts estimate that readily available foreign steel at a discounted rate may tumble the sales domestically. They stress on the need for review anti-dumping tariffs in order to counter the imports from overseas.
The market share for imported steel has risen drastically in the month of January estimated to be at 32%, the highest recorded in the US history. It resembles to time of 1990 resilience when the US steel industry is tumbling at its best and surge in imports from other countries due to strong dollar and economy made steel makers bankrupt.
The cut in rates for domestic steel resulting in some positive response from the car makers like Ford Motor Company, the spokesperson commented, “Good days ahead” on commodities reported earnings.
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