US steel production
In the last part of this series, we looked at US steel imports in November 2016. In this article, we’ll look at the weekly US steel production data released by the AISI (American Iron and Steel Institute).
According to data released by the AISI, US steel production fell 2.7% YoY (year-over-year) in the week ended December 31, 2016. Prior to this, US steel production had registered yearly rises in the last five weeks.
It’s also important to note that the rise in US steel production is due to a lower base-year effect. US steel production fell steeply in November and December 2015. Spot HRC (hot rolled coil) prices fell below $400 per ton during the same period.
While capacity utilization for the week ended December 31, 2016, was 67.1%, it was only 62.1% in the same week of the previous year. This capacity utilization was still much lower than the 90% many market participants consider healthy.
Utilization is slowly inching upward. President-elect Donald Trump’s infrastructure push could support steel production growth in the United States going forward. Some analysts expect a steep rise in US steel demand under Trump’s presidency, so companies such as U.S. Steel (X), ArcelorMittal (MT), Nucor (NUE), and Steel Dynamics (STLD) could benefit from higher shipments going forward.