Nerds of Steel

Licenses for long products imports into the US increased from 257,000 short tons in March to 462,000 short tons in April, reaching their highest levels since July 2007. Rebar licenses increased from 77,000 tons in March to 189,000 tons in April, mainly due to Turkey, which didn’t apply for any licenses in March but applied for about 95,000 tons in April. Wire rod licenses increased from 78,000 tons in March to 159,000 tons in April; about 35,000 tons due to an increase in licenses from Turkey and the remainder from other countries such as Germany and Brazil. The spreadsheet below will be updated with March actuals as soon as they are available.

MMK’s planned steel mill in southern Ohio just received final permits from the Ohio EPA. You will be able to see the permits (though they’re not yet online) at the Ohio EPA site. A number of other application documents were linked to from this post back in February.

Today US Steel reported first quarter 2008 financial results. EBITDA per ton was $62, which is up from Q4 2007 but down from the 2007 average of $78. There were some special charges (inventory adjustments and a litigation reserve) which reduced reported operating income and EBITDA. Excluding these charges, EBITDA was $71 per ton, which is still below US Steel’s peers. To see how US Steel’s results compare to its peers, check out the Nerds of Steel Earnings spreadsheet.
A transcript of US Steel’s first quarter earnings conference call can be found here.

US long products imports will continue to decline in March. Long products import licenses continued their decline to 257,000 short tons in March, compared to February import actuals of 330,000 tons and January actuals of 385,000 tons. Rebar licenses led this decline with March import licenses at 77,000 tons compared to February actuals of 119,000 tons. Parallel Flange Sections imports appear to be returning to lower levels achieved in early 2007 with March licenses at 27,000 tons compared to February’s actuals of 69,000 tons.

If you want to understand freight rates, you might first want to go to an industry overview provided by Genco Shipping and Trading Limited It includes a very good description of how different drybulk materials are shipped and what the rates you will find actually mean.

You can find current iron ore and coal freight rates on a webpage provided by metaljunction. By clicking on the world map freight route, and by “viewing the details”, you can in many cases get information on shipper, vessel name, tonnage, loading port, unloading port, etc.

Another site by the shipbroking group Simpson Spence and Young provides graphs of iron ore and coal freight rates for major world routes from January to December 2007

If you are trying to understand the historic freight differential between iron ore shipments from Brazil to China and Australia to China, see a BHP presentation from 2005, slide 15, which shows the differential from August 2001 to February 2005. Slide 16 then shows delivered costs of iron ore into China from February 2002 to December 2004.

Finally, as you probably know, there are two well-know indices of drybulk freight rates, one is from the Baltic Exchange, and the other is from JE Hyde. The Baltic indices are only available to Baltic Exchange subscribers, but you can get both the Baltic indices and the JE Hyde indices if you have a subscription to Metal Bulletin and click on the category “Maritime News”. If you don’t have Metal Bulletin access, you can read the JE Hyde indices levels in the banner on the JE Hyde home page.