The total tonnage for the week ending April 27th was 1,895 million tons, (Mt) at a capacity utilization rate of 81.4%, the fifteenth consecutive week where the utilization rate is over 80%. For the first 17 weeks of 2018, total tonnage output was 29,969Mt, at an average capacity utilization rate of 75.5%. For the same time period this year, total tonnage output was 32,466Mt, at an average capacity utilization rate of 81.8%. Thus volume was up 8.0% year on year, (y/y), while capacity utilization was higher, up 6.3 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 2018 as is typical for November/December, but has continually climbed since then. The last time the capacity utilization has trended above 80% consecutively was in 2008.

Figure 2 us-cap-fig2presents a map of the U.S. with its five steel producing zones. The nation as a whole produced 8.3% more steel than for the same period in 2018. The Great Lakes region was the largest steel producing region, with 12.041 Mt through April27th, up 7.4% y/y. The Southern region habitually the second largest, produced 12.106 Mt up 8.5% y/y.  At 3.645 Mt, the Northeast region ranked third largest. The Northeast tonnage moved-up by 1.2% y/y. The Midwest produced 3.395Mt, up 22.3% y/y, while the Western zone produced 1.255 Mt, up 8.3% 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.