Raw steel production by US mills rose modestly last week, but capability utilization remans below 80%. Utilization rates haven’t eclipsed 80% in 14 weeks.
This matters because rates at or above 80% are considered healthy. Indeed, rates below that level were part of the justification for the implementation of Section 232 tariffs in 2018.
Domestic steel output was 1,688,000 net tons in the week ending Oct. 15, while capability utilization was 75.7% — up slightly from 75.3% the previous week, according to the latest data from the American Iron and Steel Institute (AISI).
Output was up 0.5% from the week prior but down 8.4% from 1,836,000 tons during the same week last year. Mill capacity utilization last week was 0.4 percentage points above the prior week but 7.5 percentage points below the same period one year ago when utilization was 83.2%.
Adjusted year-to-date production through Oct. 15 totaled 71,395,000 tons, with an overall utilization rate of 79.3%. Production was 4.4% below the same period last year when it was 74,719,000 tons and capability utilization was at 81.2%, AISI said.
Output fell in three out of the five regions last week: The South (-4,000 tons, or -0.5%), the West (-3,000 tons, or -4.2%), and the Midwest (-1,000 tons, or -0.5%). Production rose in the the Northeast (+5,000 tons, or 3.7%) and the Great Lakes (+11,000 tons, or 2%).
Production by region for the week ending Oct. 15 was as follows: Northeast,141,000 tons; Great Lakes, 556,000 tons; Midwest, 184,000 tons; South, 739,000 tons; and West, 68,000 tons — for a total of 1,688,000 tons, up 8,000 tons from the prior week.
Note: The raw steel production tonnage provided in this report is estimated. The figures are compiled from weekly production tonnage provided by approximately 50% of the domestic production capacity combined with the most recent monthly production data for the remainder. Therefore, this report should be used primarily to assess production trends. The AISI production report “AIS 7,” published monthly and available by subscription, provides a more detailed summary of steel production based on data supplied by companies representing 75% of US production capacity.
By Becca Moczygemba, Becca@SteelMarketUpdate.com
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