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Weekly Steel Production Takes a Nosedive

Written by Tim Triplett

Domestic raw steel production plunged by nearly 10 percent in the week ending March 28 as the coronavirus took a toll on the economy and steel demand, reported the American Iron and Steel Institute. Steelmakers have announced a series of furnace idlings in the past few weeks that took an estimated 5 million tons of production out of the market. The utilization rates reported this week by AISI do not take that change in mill capability into account (and won’t unless the shutdowns become permanent).

Production for the week ending March 28 totaled 1,670,000 net tons for a utilization rate of 71.6 percent. That’s down 9.8 percent from the prior week, and down 12.7 percent compared with the same period last year. The mills had managed to keep their utilization rate above the desired 80 percent level for most of the year until measures to stem the spread of COVID-19 crippled the economy. 

The last time raw production was this low was the week ending Jan. 6, 2018, when 1,649,000 tons were produced at a capacity utilization rate of 70.7 percent.

Adjusted year-to-date production through March 28 totaled 23,653,000 net tons at an average utilization rate of 80.7 percent. That’s down 1 percent from production in the same period last year when the average utilization rate was 81.6 percent.

Following is production by district for the March 28 week: North East: 202,000 net tons; Great Lakes, 608,000 net tons; Midwest, 155,000 net tons; South, 645,000 net tons; and West, 60,000 net tons, for a total of 1,670,000 tons. Declines were seen in all regions except the West, which was flat. In total that amounts to a decline of 182,000 tons in a single week.

The raw steel production tonnage provided in this report is estimated. The figures are compiled from weekly production tonnage from 50 percent of the domestic producers combined with monthly production data for the remainder. Therefore, this report should be used primarily to assess production trends. The AISI monthly production report provides a more detailed summary of steel production based on data supplied by companies representing 75 percent of U.S. production capacity.

Note, capability for first-quarter 2020 was approximately 30.3 million tons (prior to the recent furnace idlings) compared with 29.9 million tons for the same period last year and 30.4 million tons for fourth-quarter 2019.

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