For the first 18 weeks of 2017, US steel production averaged 1.730 million (M), tons per week at an average capacity utilization rate of 73.4%. The most recent four week capacity utilization rate edged-up to 74.5% at an average production rate pf 1.726 M tons per week, 1.3% higher than the same four weeks in 2016. The year to date capacity utilization was 73.4%, 2.1% higher than YTD 2016 and 1.6% greater than YTD 2015. You have to go back to 2014 to realize a higher percentage capacity utilization, when it achieved 76.2% over the first 18 weeks.
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 moving steadily higher so far in 2017. Production for the week ending May 6th was 66.4% greater than the low point of 0.800 M the week of December, 27 2008.
Figure 2 presents a map of the US with the five steel producing zones. The Great Lakes produced the most steel, with 12.013 million tons (Mt) YTD, 41.7% of total US output. The Next at 11.106 Mt YTD, was the Southern region with 35.4% of total US output. The Northeast at 3.726 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 1.364 M tons contributing 4.4% of total US production.
Total output is trending higher, facilitated by increased production from the Great Lakes and Southern regions. However, both the Midwest and Western regions have been trending down as the Northeast production is steady. The three month moving total (MMT), was up 4.9% for the nation with 22.634 M tons. The strongest percentage growth came from the Western zone, up 16.5%, followed by a 7.2% increase from the Southern region, a 4.4% bump in the Midwest and a 3.6% change in the Great Lakes. The Northeast was the only zone with lower output, off 0.9%. Momentum (3MMT minus 12MMT was positive in all regions which is a confident sign going forward.
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.