During Nucor's Q3 conference call Thursday, Chairman and CEO Dan DiMicco addressed the heavy level of import arrivals so far this year and said that the biggest near term challenge for Nucor and the US steel industry as a whole remains heavy import levels. DiMicco noted that lower steel mill margins are primarily the result of very high import levels, and according US Census Bureau data, 2012 steel product imports are on pace to reach 27.7 million net tons in 2012, a 21 percent increase from 2011 imports.
During the question and answer portion of the call, DiMicco explained that the levels of arriving imports are "inconsistent with the domestic economy that's barely growing" and low capacity utilization rates, and a number of trade cases are pending or about to be initiated by the International Trade Commission (ITC). He added that it is extremely likely that new trade cases will soon be filed.
Even in a "good" market, there's a supply/demand imbalance in the US, DiMicco noted, and said that imports will be dealt with--and in many cases, the penalties will be retroactive.
He also addressed an oversupplied OCTG market in the US and said the biggest problem in the market remains imports as many overbought and port docks are filled with unsold import arrivals. OCTG imports will also be "addressed shortly," he said.
While DiMicco did not elaborate the details of how Nucor will handle the heavy import levels, he did say the company is exploring new ways to deal with trade issues, and that over the next six to nine months, there will be a number of activities taking place that will obviously explain the ways in which "we're dealing with this."
DiMicco wasn't too specific as to which Presidential candidate or political party would have the most favorable impact on Nucor's trade plans, but said "we certainly like the strong, tough, language Romney is putting out there on China," but that Nucor has had success during the current Democratic regime as well. Nonetheless, he remains disappointed in the lack of a tough enough stance on China in the current administration.