Steel going nowhere

Every time someone tells me that the steel and ferroalloy markets have turned the corner, I check with the latest AISI figures. In the week ended Oct. 1, 2016, US raw steel production was 1,611,000 net tons while the capability utilization rate was 68.9%. Production was 1,687,000 net tons in the week ending Oct. 1, 2015 while the capability utilization was 70.5%. The current week production represents a 4.5% decrease from the same period in the previous year. Production for the week ending Oct. 1, 2016 is up 0.4% from the previous week ending Sept. 24, 2016 when production was 1,605,000 net tons and the rate of capability utilization was 68.6%.

Adjusted year-to-date production through October 1, 2016 was 67,178,000 net tons, at a capability utilization rate of 71.8%. That is down 1.8% from the 68,434,000 net tons during the same year ago period when the capability utilization rate was 72.1%.

Capability for the third quarter 2016 is approximately 30.7-million tons versus 31.4-million tons for the same 2015 period last year and 30.4-million tons for the second quarter of 2016.

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David Hanick
David Hanick

So, you checked the AISI figures–What’s your conclusion? I would guess that a keen observer of the obvious would conclude that the ferroalloy markets have not turned the corner. I’m a neophyte here so be kind. At what capability utilization rate does the ferroalloy market turn the corner? What can the industry do? Cut capacity, the denominator or increase production and sales the numerator?