The total tonnage for the week ending April 7th was 1,805 million tons, (Mt) at a capacity utilization rate of 77.0%. For the first 14 weeks of 2018, total tonnage output was 24,643 Mt, at a capacity utilization rate of 75.5%. In 2017, the same 12 weeks production total was 24,254 Mt at 73.2%. Thus volume was up 1.6% year on year, (y/y), while capacity utilization was higher, up 2.3 percentage points.

­­us-cap-fig1Figure 1 shows production on the left-hand scale and capacity utilization as a percent on the right-hand scale. Capacity utilization and production tapered off at the end of the year as is typical for November and December. January got off to a slower start than in 2017, however production has since ramped up nicely since then, achieving levels not seen since 2014.

Figure 2us-cap-fig2 presents a map of the U.S. with its five steel producing zones. The nation as a whole produced 1.6% more steel than for the same period in 2017. The Great Lakes region was the largest steel producing region, with 9.202 Mt through April 7th, down 1.3% y/y. The Southern region habitually the second largest, produced 9.182 Mt up 6.2% y/y. At 2.969 Mt, the Northeast region ranked third largest. The Northeast tonnage moved-up by 2.2% y/y. The Midwest produced 2.29 Mt, down 1.5% y/y, while the Western zone produced 1.0 Mt, down 4.8% y/y.

Looking at raw steel production on a twelve month moving total, (12MMT) basis, we see that; The Great Lakes region produced 34,100 Mt, up 2.5% y/y. The Southern zone made 33,269 Mt, up 8.5% y/y. The Northeast region produced 10,795 Mt for a 2.5% increase y/y. The Midwest generated 8,538 Mt, down 0.6% y/y. The Western region produced 3,793 Mt, 3.1% lower on a y/y basis. Total U.S. production, (12MMT) was 90,495 Mt, up 3.1% y/y.

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.