The total tonnage for the week ending September 8th was 1,879 million tons, (Mt) at a capacity utilization rate of 80.2%, which is the highest utilization since August 2014. For the first 36 weeks of 2018, total tonnage output was 64,240Mt, at an average capacity utilization rate of 76.3%. In 2017, the same 12 weeks production total was 62,633Mt at 74.2%. Thus volume was up 2.6% year on year, (y/y), while capacity utilization was higher, up 2.1 percentage points.

­­uscap-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 2017 as is typical for November/December, but has continually climbed since then.

Figure 2 uscap-fig2presents a map of the U.S. with its five steel producing zones. The nation as a whole produced 2.6% more steel than for the same period in 2017. The Great Lakes region was the largest steel producing region, with 23.945 Mt through September 8th, up 0.2% y/y. The Southern region habitually the second largest, produced 23.774 Mt up 5.2% y/y. At 7.64 Mt, the Northeast region ranked third largest. The Northeast tonnage moved-up by 1.8% y/y. The Midwest produced 6.194 Mt, up 3.9% y/y, while the Western zone produced 2.687 Mt, down 1.2% y/y.

Looking at raw steel production on a twelve month moving total, (12MMT) basis, we see that; The Great Lakes region produced 34,259Mt, up 0.3% y/y. The Southern zone made 33,975 Mt, up 8.6% y/y. The Northeast region produced 10,865 Mt for a 1.8% increase y/y. The Midwest generated 8,803 Mt, up 3.5% y/y. The Western region produced 3,811 Mt, up 0.1% on a y/y basis. Total U.S. production, (12MMT) was 91,713 Mt, up 3.7% 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.