January 2003 Steel Imports Decline Slightly; President Urged to Keep Steel Program in Place

Washington, DC— Based on preliminary Census Bureau data, the American Iron and Steel Institute (AISI) reported that the United States imported a total of 2,423,000 net tons (NT) of steel in January (down 15.7 percent from December), including 1,886,000 NT of finished steel (down 17.1 percent). Despite this modest decline from the previous month, annualized steel import volumes for 2003 calculated from the January volumes, both total (29,081,000 NT) and finished (22,629,000 NT), are on pace to be historically high.

Products showing significant increases in January compared to December included the following products that are subject to tariffs of up to 30 percent under the Section 201: hot-rolled strip (up 62 percent), plate-in-coil (up 34 percent), and hot-dipped galvanized sheet & strip (up 17 percent). Other large increases were in concrete reinforcing bars and rods (up 149 percent), bars-light shapes (up 90 percent), oil country tubular goods (up 57 percent), and structural pipe and tubing (up 26 percent), and line pipe (up 20 percent). Products showing increases from this month last year included plate-in-coils (up 74 percent), hot-rolled strip (up 48 percent), line pipe (up 40 percent), and hot- dipped galvanized sheet and strip (up 16 percent).

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In January, average import customs values for finished steel in the aggregate were nearly 3 percent below their historic (1980-2000) averages. At the same time, according to Purchasing Magazine data, January monthly "spot" prices for hot-rolled sheet remained at their December number of $300, down from a peak of $400 in July 2002; the monthly spot prices for cold-rolled sheet also remained at their December number of $410, down from a peak of $525 in July and August 2002; and the January 2003 spot price for flat-rolled steel was 10 percent below the 21-year averages as well as being 5 percent below the 2002 average. These Purchasing Magazine data tend to lag actual transactions and, therefore, understate the extent of actual price deterioration in the U.S. market. According to independent, publicly available sources, as a result of these historic declines in spot steel prices, the U.S. is today at the low end of steel prices worldwide -- with hot-rolled sheet prices in the U.S. now lower than the prices in China, Taiwan, Japan, India and much of Europe.

Daniel R. DiMicco, vice chairman, president and CEO of Nucor Corporation and chairman of AISI, cautioned against making any broad conclusions with only the first month's import data for 2003 at hand. "The President's program has resulted in a modest decrease in imports in January, but they still remain at historically high levels, particularly when considering the reduced level of demand in the United States. The industry is consolidating and reorganizing in accordance with the President's initiative.

Continued vigilant enforcement of the trade remedies is critical for this industry to emerge successfully when the 201 relief concludes in March, 2005."

"The President's program is absolutely critical to our future," Andrew G. Sharkey, III, AISI President and CEO, said. "The American steel industry is just starting to turn the corner. Even with a slight decline in imports, we are still looking at an annualized import level of nearly 30 million tons in the midst of a weak economy. We support the President and urge him to stand firm and keep the program in place for the full three-years intended."

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