US steel production inches upward in first half of July

The United States produced 1.29 million net tons of steel during the week ended July 11, for a capability utilization rate of 57.5 percent, according to the American Iron & Steel Institute (AISI), Washington. Production increased 1.7 percent from the prior week ending July 4, when 1.27 million net tons of steel were made. However, compared with the comparable period in the previous year, production was 1.85 million net tons at a capability utilization rate of 79.4 percent. The current week production represents a 30.2 percent decrease from the same period in the previous year.

Production for the week ending July 4 of this year increased 2.3 percent from the previous week ending June 27, when production was 1.24 million net tons and the rate of capability utilization was 55.4 percent, AISI notes. This represents a 31.6 percent decrease in production compared with the same period in the previous year. For the comparable period in 2019, production was 1.85 million net tons, while the capability utilization then was 79.7 percent.

Capability for the third quarter of 2020 is approximately 29.4 million tons compared with 30.6 million tons for the same period last year and 29.1 million tons for the second quarter of 2020, AISI notes.

Adjusted year-to-date production through July 11 of this year was 41.93 million net tons at a capability utilization rate of 66.6 percent, AISI says. That's a 19.4 percent decrease from the 52.01 million net tons produced during the same period in 2019, when the capability utilization rate was 80.9 percent.

The South led production for the week ending July 11, producing 523,000 tons, AISI reports. The Great Lakes region produced 439,000 tons of steel, while the Northeast produced 141,000 tons; the Midwest, 125,000 tons; and the West produced 61,000 tons.

Idled capacity restarts

The increase in steel production comes as many mills have announced they are restarting production capacity that they had idled earlier in the year in response to reduced demand arising from COVID-19, the disease associated with the novel coronavirus.

According to reporting from Argus Media, United States Steel Corp., (U.S. Steel) planned to restart the No. 6 blast furnace at its Gary, Indiana, steelmaking complex after the July 4 weekend to meet increased demand. The company idled the blast furnace in late April because of reduced demand related to the shutdown of the automotive industry.

Argus reports that 19 million tons of annual domestic flat-rolled steel production capacity were taken offline earlier this year in response to reduced demand arising from the pandemic.

U.S. Steel also restarted its idled No. 1 blast furnace at its Mon Valley Works near Pittsburgh in early June. However, according to Argus Media, which cites multiple industry sources, this furnace was brought online because the company was having issues with its No. 2 blast furnace at the site.

According to published reports, Cleveland-Cliffs also will restart its AK Steel mill in Dearborn, Michigan, later this month.* However, Patricia Persico, the director of corporate communications at Cleveland-Cliffs says the company has not announced its plans for the timing of the restart of the mill, adding that the reports are based on market speculation.

The Cleveland-based company also announced in early June the resumption of construction of its hot-briquetted iron (HBI) plant in Toledo, Ohio, and the restart of its Tilden mining operations in Michigan.

The construction of the Toledo HBI plant was temporarily shut down March 20. Because of mandatory social distancing and other newly implemented safety-related measures limiting the number of workers allowed simultaneously on the job, construction is now expected to be completed in the fourth quarter of this year, the company says.

The Tilden mine primarily supplies the company’s AK Steel facilities in Middletown and Dearborn. The mine was idled in mid-April and expected to restart the mine in July. The company said it would restart Tilden in June instead in response to a faster improvement in steel demand from AK Steel’s clients than initially anticipated, particularly in the automotive sector.

Cliffs’ Chairman, President and Chief Executive Officer Lourenco Goncalves says in a press release released in early June about the restarts, “The demand for our steel, iron ore and metallics products has recovered dramatically over the past month, and in light of this, we are restarting Toledo and Tilden sooner than we originally expected. We suspended these operations in a way that allowed us to restart as easily and efficiently as possible, and that is what we will do. Our footprint is well-situated to capitalize on the rapidly increasing demand from the automotive sector, which is occurring faster than our most aggressive expectations.”

A prolonged closure

Despite the restarts that are based on increased demand from the automotive sector, JSW Steel USA, a subsidiary of India-based JSW Steel, says it will idle its Mingo Junction, Ohio, electric arc furnace (EAF) as of the end of August because of declining demand. The company issued a Worker Adjustment and Retraining Notification (WARN) Act notice to the Ohio Department of Job and Family Services July 14 announcing layoffs in conjunction with the cessation of operations at the facility.

According to the JSW Steel website, the Mingo Junction facility, with 1.5 million tons per year of EAF melt capacity, is designed to produce 72-inch hot-rolled coils. The mill complex also is equipped with slab continuous casting machinery and 3 million tons (annual capacity) of hot strip mill and roll machinery.

JSW tells Argus Media it will replace the existing EAF mill in Mingo Junction with a new Tenova Consteel EAF with the same capacity that will allow the Mingo Junction mill to produce 12-inch slabs for company's pipe and plate mill in Baytown, Texas, and other customers.

*This story originally stated in error that AK Steel would restart its Middletown, Ohio, blast furnace in July. That furnace has not been idled as a result of COVID-19 and has continued to operate this year. The information from Patricia Persico also was added regarding the Dearborn, Michigan, mill.