North American Steel Prices Firm Up Despite Import Threat

The large price gap between North American steel markets and the rest of the world has been sucking in high volumes of imports. But this increased foreign competition does not appear to be damaging US domestic mills’ ability to raise their selling prices.

In the first two months of this year, US steel imports were […] about 18 percent more than the figures recorded during the previous two months, and a substantial 26 percent above January/February 2005.

The strong prices available in the US market are the main reason why imports are rising. As MEPS has regularly reported, North America has the world’s highest steel prices for most products. And the premiums are far from negligible: some types of steel have been selling for hundreds of dollars more in the USA and Canada than in many Asian and European countries.

The recent narrowing of these wide price differentials may put a brake on imports. But the inflow of steel has also been spurred by other factors such as the strength of US demand for steel and the low level of stocks in the US supply chain. Service centre inventories – in terms of months’ supply on hand – fell to a two-year low in March.

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