US Steel Imports Dip in May

​U.S. steel imports fell to 2.3 million metric tons in May, while imports through the first four months of the year came in flat year over year at 8.4 million metric tons. In the U.S., the market remains extremely tight and mill lead times are out to the end of this year so prices are set to stay high into 2022.

Its a similar situation in Europe where the steel market is seeing a similar post-pandemic bounceback. The supply chain is restocking but constraints such as the tariffs on imported material are having an impact. However, in the rest of the world, global steel production seems to be slowing as raw materials prices, such as iron ore, are easing.

Capital Economics reported global daily steel production in May came in lower than April, as output in China dipped. The World Steel Association reported global steel production rose by an impressive 16.5% year over year in May. However, base effects are at play here becuase this number is compared against a 2020 reference point during which many countries were only starting to emerge from national lockdowns in May 2020. Looking at the month-over-month growth rate, daily global steel output fell by 0.4% in May following a 3.5% rise in April.
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In conjunction with this, we've been hearing dire warnings from Beijing’s about  manipulative speculative pricing as well as restrictions on credit for construction. There is also pressure on polluting industries to reduce emissions and all of these factors have combined to cause a sharp correction in iron ore prices, which are now down 9% on the Dalian exchange to $173/ton this week.