Steel sector enters December on the rise

Raw steel production in the United States surpassed 1.7 million tons the week ending Dec. 2. That total marked a 7.1 percent increase compared with the same week last year and was up by 0.9 percent compared with the previous week.

The Washington-based American Iron and Steel Institute (AISI), which compiles the figures, says the steel mill capability utilization (capacity) rate in the most recently completed week was 74.1 percent.

That figure represents a slight uptick from the 73.4 rate the previous week and is nearly 3 percent higher compared with the 71.2 percent capacity rate at this time last year.

Year-to-date output, after enduring some lower month-to-month comparisons earlier this year, has nearly caught up with 2022. Annual production through Dec. 2 was 81.94 million tons, which is down 0.3 percent from the 82.23 million tons made during the same period last year.

The mill capacity rate has averaged 75.5 percent so far in 2023, which is down by 2.6 percent compared with the 78.1 percent figure for the first 11 months of 2022, according to AISI.

The lower capacity rate average likely reflects the impact of some new capacity that has ramped up or come online this year. In the past few months, however, at least one electric arc furnace (EAF) mill (Republic Steel in Ohio) and one blast furnace (operated by United States Steel Corp. in Illinois) have been idled and likely revised the total capacity denominator figure downward.

U.S.-based steel producers largely have reported healthy earnings this year, although not necessarily with the ability to meet record profits last year. Most have reported stable to rising shipments this year compared with last.

Charlotte, North Carolina-based Nucor Corp., America’s largest EAF producer, reports its steel mills shipped out more than 8.3 million tons of product in the first nine months of 2023. That represents a 4 percent increase from the slightly less than 8 million tons its mills produced in the first three quarters of last year.

Cleveland-Cliffs, which makes most of its steel via the blast furnace/basic oxygen furnace (BOF) method, shipped nearly 12.4 million tons of steel products in this year’s first three quarters. That figure is up by 13.5 percent from the 10.9 million tons it shipped in the first nine months of 2022.

Lourenco Goncalves, president and CEO of the Cleveland-based firm, says the third quarter of this year was specifically highlighted by Cleveland-Cliffs achieving another record in automotive steel shipments.

In remarks accompanying Cliffs’ third quarter financials, Goncalves sounded an optimistic note regarding the company’s order book, saying, “With underlying demand that is still strong and depleted inventories among service centers, we were able to successfully bring buyers off the sidelines with our price increase announcements. We expect that in Q4 we will see the end of the UAW strike and more normal buying patterns from service centers. That should support us not only in Q4, but into 2024 as well.”