Domestic Mills Fall Below 60 Percent of Capacity

U.S. raw steel production continued to plummet last week as domestic steelmakers took further steps to adjust output to weak steel demand as the economy struggles with the coronavirus. Production in the April 11 week totaled 1,256,000 net tons with the mills operating at an average capability utilization rate of 56.1 percent, down from a rate of 68.5 percent in the week ending April 4, reported the American Iron and Steel Institute. The current week’s production represents a 33.6 percent decrease from the same week last year. The last time raw steel production was this low was the week ending July 25, 2009, during the Great Recession, when 1,254,000 tons were produced at a utilization rate of 52.6 percent.

AISI’s capacity utilization figures are somewhat misleading as they do not factor in furnaces that have been idled by various mills in the past few weeks. AISI considers a furnace to be part of a mill’s capability until it has been shut down permanently. Thus, the mills that remain in production are most likely operating above the levels currently reported by AISI.