U.S. Year-to-Date Steel Capacity Utilization Rate Holds at 80.3%

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The U.S. steel sector’s capacity utilization rate incrementally declined in recent months, falling from 81.0% for the year to date as of late August down to 80.3% as of this past week, according to the American Iron and Steel Institute (AISI).

The year-to-date capacity utilization rate this year has reached as high as 81.9% (back in April).

The figures come in as some U.S. steel prices — including HRC, HDG and CRC — showed some upward momentum late last week.

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For the year to date through Nov. 16, capacity utilization came in at 80.3% for the fifth straight week.

For the year through Nov. 16, the U.S. steel industry produced 85.3 million net tons of steel, marking a 2.3% increase from the 83.4 million net tons produced during the equivalent period in 2018 (when the capacity utilization rate was 78.1%).

Meanwhile, for the week ending Nov. 16, steel production checked in at 1.88 million net tons at a capacity utilization rate of 81.1%. The weekly production figure marked a 1.4% decline on a year-over-year basis, compared with 1.90 million net tons produced during the week ending Nov. 16, 2018 (during which capacity utilization was slightly higher, checkin in at 81.2%).

Meanwhile, production for the week ending Nov. 16, 2019, was up 0.8% compared with production the previous week, which totaled 1.86 million net tons at a capacity utilization rate of 80.5%.

By region, production for the week of Nov. 16, 2019, totaled:

  • Northeast: 206,000 tons
  • Great Lakes: 650,000 tons
  • Midwest: 180,000 tons
  • Southern: 763,000 tons
  • Western: 77,00 tons

Steel Prices Make Gains at Last Week’s Close

While steel prices are still depressed overall, several forms showed some upward momentum last week.

U.S. CRC, for example, ticked up to $701/st to close the week after trading at $684/st the previous session. However, CRC is still down 3.04% on a month over month basis, according to MetalMiner IndX data.

U.S. HDG, meanwhile, rose to $770/st on Friday, up from $748/st the previous session. HDG, however, is down 2.41% on a month-over-month basis.

U.S. HRC ticked up from $483/st to $511/st to close the week, but remained down 3.95% over the previous month.

As is often the case, plate prices bucked the aforementioned trend.

U.S. plate prices dipped below MetalMiner’s short-term support level of $677/st, falling to $611/st. U.S. plate is down 15.96% over the previous month.

In its October quarterly earnings report, steelmaker Nucor said it believed steel prices had bottomed out.

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“Nucor’s earnings in the fourth quarter of 2019 are expected to decrease as compared to the third quarter of 2019,” the company said. “We expect earnings in the steel mills segment to further decrease in the fourth quarter of 2019 from the third quarter, as lower steel prices at the end of the third quarter, which we believe have bottomed, impact our fourth quarter results.”

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