U.S. Steel Prices Tumble in February

The Wall Street Journal reported recently that domestic steel makers in the U.S. slashed prices in February to cope with a flood of imports juiced by the strong dollar, a move that will pressure their profit margins and reduce costs for buyers of steel.

Imports rose 33% in January compared with the year before, according to figures released Wednesday by the American Iron and Steel Institute, reaching 3.85 million tons, compared with 2.9 million tons a year earlier. The jump in imports comes as oil and gas drillers cancel orders for steel pipe, underscoring the resilience of overall U.S. demand compared with other markets.

Now, the muscular currency is making foreign steel less expensive by comparison. The imports are rising off an already high 2014 base. Imports of steel from Russia jumped 96% in 2014 from a year earlier, to 6.5 million tons, while imports from China rose 69% to 2.8 million tons.

To stem that tide, steel makers with major U.S. operations such as ArcelorMittal, U.S. Steel Corp. and Nucor Corp. have cut prices in the past few weeks, according to steel distributors who buy from them. The benchmark hot-rolled coil index is down 17 percent since the start of the year, to around $500 a ton, its lowest level since August 2009.

“Suddenly you can buy domestic American hot-rolled coil for the same price you can buy it from India, Egypt or Turkey,” said Barry Bernsten, managing partner at American Steel Industries LLC, a steel importer and distributor.

Steel industry insiders don’t expect prices to recover until May at the earliest. S