In a year which has seen faltering growth from many emerging economies and continued weakness in Europe, it has been the US that has driven world economic growth. In 2014, US GDP increased by 2.4% as the country continued its recovery. This growth has resulted in an increase in demand for steel and whilst steel production in the country increased by a steady 2%, much of this demand growth has been supplied by increased imports which were a whole 37% higher than in 2013 as the strengthening dollar and growing economy, combined with some softening in demand from other countries has made the US a very attractive destination for overseas producers.
In 2014 we saw growth from all major sources of imports but the largest increases have been seen from countries further afield so whilst imports from Canada and Mexico were only up 10% and 14% respectively, imports from the EU increased by 45%, mainly driven by supply from the UK, imports from South Korea were up 43%, imports from Turkey increased by 83% and imports from India grew by 46%. Previously we have described how a slowdown in Chinese demand has led to an increase in exports from China and predictably the attractive US market has also seen imports rise from China, increasing by 62% year on year. The Chinese producers have been targeting very specific products, however, with imports of Chinese cold rolled coil increasing by three times and imports of hot dipped galvanised steel increasing by nearly four-fold.
The sheer quantity of increases from these countries is remarkable but one source country stands out in particular US imports from Russia increased by an incredible 150% to record a figure of 4.2MT which makes Russia the fourth largest supplier to the US behind just Canada, South Korea and Brazil. As far as products are concerned, the largest increase in tonnage from Russia has been steel slabs, which doubled during the year but potentially more interesting is the fact that hot rolled coil imports from Russia increased by an astonishing 25 times to register a tonnage of 850KT. Given the strained relationship between Russia and the US this situation is perhaps surprising but the deterioration in the Russian economy and the collapse in the Russian Ruble must make US markets very attractive to Russian producers.
So far this year, US Imports in January were 37% above those of the same month last year which indicates that this dynamic shows no sign of abating in the short term but it would not be surprising to see the country start to erect trade barriers on certain products in order to help protect domestic suppliers.