Metals

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Steel Production Off 26% From Year Ago Due to Coronavirus

17 Aug, 2020


The American Iron and Steel Institute reports that domestic raw steel production for the week of August 8 was 1.3 million net tons at a capacity utilization rate of 60.4%, which is 26.5% worse than the same period a year ago, when production was 1.8 million net tons at a capacity utilization rate of 79.1%.
 
The figures were estimated based on production data from half of domestic producers and analysis of monthly production data, which the AISI says is useful for analyzing production trends—and those trends show an industry stalled by the economic impact of the COVID-19 virus.
 
Shipments of metal are also still down but recovering. In June, U.S. mills shipped 6.0 million tons, 10.3% more than in May but 22% less than in June 2019. May had been worse: U.S. mills shipped 32.9% less steel in May 2020 than they did in May 2019.
 
Regionally, the large South region is currently producing the most steel, followed by the Great Lakes region: the South produced 538,000 tons of the metal last week, up 23,000 tons from the week before, while the Great Lakes region made 471,000 tons, or 9,000 more tons than the week of August 1.
 
The crushed demand for steel products was driven largely by shutdowns of metal consumers, including automotive manufacturers like Ford and General Motors. While those automakers have largely resumed all of their operations, the impact has put metal manufacturers in a deep hole relative to expected pre-pandemic numbers. On July 20, members of the AISI asked Congress to include infrastructure projects in the next COVID-19 relief bill in order to drive demand. In a letter, the manufacturers asked Congress to “include at least $37 billion for state DOTs in the future relief bill that will be considered by Congress this month.” Progress on such a bill has been stalled by conflicting priorities between members of Congress.
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