Over the first 16 weeks of 2017, US steel production averaged 1,732,000 tons per week at an average capacity utilization rate of 73.3%. The most recent four week capacity utilization rate was 73.2%. This was 1.8% higher than the same period in 2016.
Figure 1 shows production on the left-hand scale and capacity utilization as a percent on the right-hand scale. Production and capacity utilization have been steadily ramping-up so far in 2017. Production was 0.6% lower month on month this week, however, on a year to date (YTD) year on year (y/y) basis production has been higher every week thus far in 2017.
Figure 2 presents a map of the US with the five steel producing zones. The Great Lakes produced the most steel, with 10.634 million tons (Mt) YTD, 38.4% of total US output. The Southern region runs a close second with 9,898 Mt YTD, 35.7% of total US output. The next largest producing region is the Northeast at 3,306 Mt, representing 11.9% of US production. The Midwest produced 2,665 Mt YTD for 9.6% of the total and the Western region made 1,206 tons contributing 4.4% of total US production.
Figure 3 shows production history from 2012 to present for the five steel producing regions on the left-hand Y axis and the total on the right-hand Y axis. The total is trending higher, helped by growth from the Great Lakes and Southern regions. The Northeast production is steady, while both the Midwest and Western regions have been trending in a downward direction. In an encouraging sign, looking at the data from a momentum perspective (defined as 3 month YTD minus 12 month YTD), all regions are positive.
At Gerdau, we track US steel production and capacity utilization to keep an eye on the overall health of the US steel industry. We feel it is important to understand the forces that influence steel demand to include the strength of the US economy and import penetration.