U.S. raw steel production continues to leap on a weekly basis on an improvement in capacity utilization — a key metric in the steel industry. According to the latest American Iron and Steel Institute (“AISI”) weekly report, domestic raw steel production was 1,484,000 net tons for the week ending Oct 3, a 0.3% increase from production of 1,480,000 net tons for the week ending Sep 26. This follows a 2.4% rise on a weekly comparison basis for the week ending Sep 26.
However, the weekly production still trails that of a year ago. Production for the reported week was down 17.7% from 1,803,000 net tons registered for the same period a year ago.
Weekly Utilization Ticks Up
Capacity utilization was 66.6% for the reported week, rising from the previous week’s reading of 66.1%, indicating an improvement in activity. However, it was still well below the key 80% threshold — the minimum rate required for sustained profitability of the industry. Capability utilization rate for the reported week was down from 77.7% a year ago, AISI noted.
Notably, after remaining above the 80% the level in early 2020, capacity utilization rate tumbled to 51.1% in May — the lowest level in many years as the coronavirus pandemic decimated demand across major steel end-use markets. Utilization has started to pick up with a recovery in steel demand from the slump witnessed during the first half of 2020.
Meanwhile, by-region, output from Great Lakes rose roughly 1% on a weekly basis to 531,000 net tons in the reported week. Production in the Southern region slipped roughly 3% to 575,000 net tons in the reported week. Mills in the North East produced 144,000 net tons of raw steel, up around 13% from the previous week. The Midwest region produced 168,000 net tons of raw steel,