AISI Adjust 1st Quarter Capacity

The American Iron and Steel Institute (AISI) adjusted their first quarter production rate for the domestic steel industry. In a note attached to their press release they advised:

“Note: Capability for the First Quarter 2013 is approximately 30.8 million tons versus 32.3 million tons for the same period last year and 32.7 million tons for the Fourth Quarter of 2012. Production capability for 2013 reflects the closure of several steelmaking facilities in 2012, new facilities coming on-line and improvements made to existing facilities to increase their capability. When comparing capability utilization rates between 2013 and 2012, the user of this data should take into account the change to capability for 2013 in analyzing the data.”

Steel Market Update spoke with representatives of the AISI regarding the reasons for the changes and we were advised they were due to the closure of the RG Steel facilities as well as capability adjustments at other facilities. For example, the number changed in fourth quarter 2012 vs. 1st quarter 2012 due to the addition of the new EAF at Severstal Columbus.

We did additional research and found other production adjustments were also taken into account.

With the changes, it is more important to compare tons produced week-over-week and year-over-year as opposed to capacity utilization rates. Using the first week of January as an example, in 2012 the U.S. mills produced 1,902,000 tons and during the first week 2013 they produced 1,756,000 tons. The capacity utilization rate will have little use for historical comparison purposes.