The total tonnage for the week ending January 1st was 1,906 million tons, (Mt) at a capacity utilization rate of 81.3%, which is the seventh consecutive month where the utilization has been over 80%. For the year of 2018, total tonnage output was 84,992Mt, at an average capacity utilization rate of 77.3%. In 2017, the same time period production total was 81,661 Mt at 74.2%. Thus volume is up 4.0% year on year, (y/y), while capacity utilization is higher, up 3.1 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 2017 as is typical for November/December, but has continually climbed since then.

Figure 2 us-cap-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 32.215 Mt through December 1st, up 1.4%% y/y. The Southern region habitually the second largest, produced 32.086 Mt up 6.1% y/y.  At 10.294 Mt, the Northeast region ranked third largest. The Northeast tonnage moved-up by 4.0% y/y. The Midwest produced 8.623 Mt, up 8.9% y/y, while the Western zone produced 3.661 Mt, up 2.7% 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.