The U.S. steel sector has slowly but surely been showing some signs of recovery.
Steel mills operated at a capacity utilization rate of 58.9% for the week ending July 25, up from 58.3% the previous week, according to the American Iron and Steel Institute (AISI).
If you need to smooth earnings, a scrap contract makes more sense than a finished price index. See why.
Steel production rises 1.1% week over week
Steel production last week reached 1.32 million net tons, marking a 28.5% year-over-year decline but a 1.1% increase from the previous week (when the capacity utilization rate reached 58.3%).
The capacity rate for the week ending July 25, 2019, reached 79.4%.
Year-to-date production (through July 25, 2020) totaled 44.55 million net tons at a capacity utilization rate of 66.1%. Production in the year to date is down 20% from the 55.70 million net tons during the same period last year (which came at a capacity utilization rate of 80.9%).
By region, production for the week ending July 25, 2020, totaled:
- Northeast: 133,000 net tons
- Great Lakes: 471,000 net tons
- Midwest: 129,000 net tons
- Southern: 524,000 net tons
- Western: 63,000 net tons
Falling steel imports
Late last week, AISI reported U.S. imports of steel through the first half of 2020 declined 20.8% year over year.
Through the first six months of 2020, total steel imports reached 12.39 million net tons, down 20.8% year over year.
Finished steel import market share reached an estimated 21% in June and was estimated at 19% over the first six months of 2020.
Through the first half of 2020, imports of line pipe and oil country goods saw the steepest declines, falling 65.3% and 46.6%, respectively.
In June, however, line pipe imports jumped 30.2% compared with May imports. June imports of strip hot dipped galvanized jumped 23.3% from the previous month.
By top offshore sources, South Korea led the way with 187,000 net tons sent to the U.S., which marked a 19% decline.
Are you under pressure to generate steel cost savings? Make sure you are following these 5 best practices!
Trailing South Korea were:
- Germany (79,000 net tons, up 22%)
- Taiwan (65,000 net tons, down 22%)
- Japan (61,000 net tons, down 41%)
- China (39,000 net tons, up 13%)
Meanwhile, for the first six months of 2020, South Korea was also the largest offshore supplier, sending 1.12 million net tons, down 23% year over year.
Through the six-month period, South Korea was trailed by:
- Japan (434,000 net tons, down 40%),
- Germany (377,000 net tons, down 39%)
- Taiwan (333,000 net tons, down 36%)
- Turkey (323,000 net tons, up 66%)