Steel Import Licenses Decline 14.9% June import licenses dropped 14.9% from May to 1,773,206 tonnes but remain more than double the level of a year ago. Total imports for the first six months were up some 35.1% from a year ago while the June decline came on the back of a surge in imports in recent months, culminating in May licenses rising to 1,948,817 tonnes, up more than 2.5 times the low of 782,093 from June 2009. Chinese Licenses Surge 34.5% - Trojan Horse? We're concerned about the surge in Chinese imports, despite recent changes in export tax rebates. In particular, we're worried about what we've called the "Trojan Horse" -- a seeming benefit that's actually a problem as China has pulled back export tax rebates on commodity grade steels. But because of the nature of VAT incremental taxation, this has essentially expanded the rebates on exports of value-added steels. June imports of value-added steels from China jumped; value-added sheet grades jumped 23% while mechanical tube was up 23.5%, line pipe rose more than tenfold from 351.3 tonnes in May to 4,120 tonnes in June. Cold-rolled bar imports surged 71.4% from May and stainless steel overall was up a whopping 36% from May to the highest level in nearly two years. Latin America and Asia Buck Declining Trend Import licenses from Brazil and Taiwan also rose in the month, up 56.2% and 181.4% respectively, while licenses from Venezuela surged from 37.8 tonnes to 30,719 tonnes in the month. Imports from Taiwan, at 68,628 tonnes, were the highest since January 2009, while Brazilian licenses, at 118,805 tonnes, were the highest since June 2008. Nafta regions showed a mix trend, with Mexican imports up some 0.6% and Canadian imports down 13.5%. Japanese imports showed a surprising decline, as the region has been exporting more steel of late, coming down some 54.7% to 64,225 tonnes, the lowest level since August 2009. Semi-Finished Imports Decline; Rebar Jumps Semi-finished imports were down some 22% in June reflecting the catch-up in production by the domestic blast furnace flat-rolled mills, which generally use semis to supplement their own production at inflection points in demand. Other meaningful declines were seen in coiled plate, down 51.6%, reflecting strength in global plate markets. Bucking the declining trend were rebar imports, up some 62.9% in June.