Steel capacity utilization reaches near-decade high

A bar of steel goes through the 80-inch hot strip mill on its way to becoming a coil of steel. Steel capacity utilization topped 83 percent last week.

Great Lakes steel production dropped to 716,000 tons last week, a decrease of 13,000 tons, or 1.7 percent, as compared to the previous week, even as capacity utilization in the United States hit a near-decade high.

Steel mills in the Great Lakes region made 729,000 tons of metal the previous week, according to the American Iron and Steel Institute. Most of the steel made in the Great Lakes region is produced around the southern shore of Lake Michigan in Lake and Porter counties, which are home to half the nation's blast furnace capacity.

Overall, domestic steel mills made 1.934 million tons of steel last week, up slightly from 1.93 million tons the previous week.

U.S. steel mills have run at a capacity utilization rate of 81.6 percent through March 23, up from 76.6 percent at the same point in 2018, according to the AISI.

Domestic steelmakers used about 83.1 percent of their steel-making capacity in the week that ended March 23, up from 78.3 percent a year earlier and 82.9 percent the previous week, according to the American Iron and Steel Institute.

A steel capacity utilization rate of 83.4 percent three weeks ago was the highest level reached in the United States since September 2008, according to the trade publication Platts.

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Some analysts say steel-making capacity utilization of about 90 percent is considered financially healthy for the industry, at least for the larger integrated mills like those around Lake Michigan in Northwest Indiana, because of their high fixed operating costs.

But the capacity utilization rate has been significantly higher this year than during the most recent downturn, when blast furnaces were taken offline at ArcelorMittal Indiana Harbor in East Chicago and elsewhere.

So far this year, domestic steel mills have made 22.2 million tons of steel, a 6.6 percent increase over the same period in 2018.

Production in the Southern district, a wide geographic swath that includes many mini mills, rose to 737,000 tons last week, up from 711,000 tons the previous week.

Steel output in the greater Midwest fell to 214,000 tons last week, down from 226,000 tons the previous week.


Business Reporter

Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.