Weekly Raw Steel Production: An Analysis

Note that both of these estimated levels are based on reports by 50 percent of the domestic mills. The monthly report, released approximately two months after the initial report, is considered to be a more accurate forecast as it is based on reports by 75 percent of mills. The monthly report for May 2013 put total production at 8,117,115 tons for the month, or 1,833,000 tons per week. During this time last year, the weekly production levels were nearly 50,000 tons higher.

Our most recent comparison of weekly and monthly estimates is for March 2014. Estimates put weekly production at 1,846,800 tons and monthly production at 1,868,115 tons, a difference of 21,315 tons. Note that weekly estimates can vary significantly from the final monthly estimates.

It appears that the inventory adjustments being made at the U.S. service centers are tied directly to the amount of imports coming into the country and not the amount of steel being shipped out of the domestic steel mills. The domestic mills appear to be struggling to get above the 1.85 million ton per week raw steel production mark. SMU believes, based on our conversations with customers and the data that we are collecting through our market analysis, that demand is higher than it was last year–but it is not being translated into higher production at the steel mills. This will be a subject which will be discussed by industry consultant, Paul Lowrey of Steel Research Associates at our September 3 & 4, 2014 Steel Conference in Atlanta.

Estimated total raw steel produced for 2014 YTD (year to date) is reported to be 35,770,000 tons, down 0.7 percent from the 36,025,000 tons produced in the same period in 2013. The average capacity utilization rate for 2014 YTD is estimated to be 76.1 percent, down from 76.8 percent for 2013 YTD. Note that there has been a change in production capability for 2014.  Capacity utilization rates for 2013 and 2014 are compared against different production levels, making total tonnage figures best suited for yearly comparisons.

Week-over-week changes per district are as follows: North East at 227,000 tons, up 4,000 tons. Great Lakes at 627,000 tons, down 7,000 tons. Midwest at 226,000 tons, down 17,000 tons. South at 670,000 tons, up 17,000 tons. West at 88,000 tons, down 2,000 tons. Total production was 1,838,000 tons, down 5,000 tons.

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{amchart id=”84″ Weekly Raw Steel Production from AISI}