he
melt shops of steelmakers in the United States produced less steel in the week
ending Dec. 24, 2022, compared both with the prior week and the comparable week
in 2021.
In the most recently completed week, steel production in the U.S.
was 1.614 million tons, representing an 8.7 percent drop from the 1.768 million
tons of output one year ago. The 1.614 million tons figure also is down 0.8
percent from the previous week (ending Dec. 17, 2022), when production was
1.627 million tons.
Year-to-date U.S. output of 87.6 million tons equates to a decline of 5.6 percent compared with the 92.8 million tons produced in the timeframe from Jan. 1 to Dec. 24, 2021.
In terms of mill capability utilization (capacity) rate, the 2022
average figure of 78.0 percent represents a 3.9 percent decline from the 81.2
percent 2021 average.
Although steelmakers based in the U.S. reported record and
near-record profits in much of 2021 and into the first half of 2022, of late
they have been warning of
reduced expectations for the this year’s fourth quarter and uncertainty
regarding 2023.
The U.S. is not alone in its reduced steel output in 2022, as
evidenced by data collected by the Brussels-based World Steel Association
(Worldsteel). That association has reported that
in the first 11 months of this year, all but two (India and Iran) of the
world’s 10 largest steelmaking nations have demonstrated declining steel output
in 2022.
The slower domestic steel sector combined with reduced output in
leading U.S. ferrous scrap export market Turkey has helped produce a price for
scrap iron and steel that has stayed down in a trough throughout
much of this year. The conditions have caused at least one metals recycling
firm in the U.S. to warn of a less profitable
landscape in late 2022.
In the People’s Republic of China, which currently produces about
half of the world’s steel, an overbuilt apartment tower market has likely led
to a steel sector due to be scaled back. The Beijing-based China Iron and Steel
Association (CISA) has indicated that from Dec. 11-20 this year, its
steelmakers produced 1.15 percent less steel compared with the first 10
days of the month.
According to India-based website SteelOrbis, that reduction has
taken place after the early December period marked a 2.06 percent drop in
output compared with the final 10 days of November.
At the same time, according to the CISA as reported
by SteelOrbis, finished steel inventories in China rose by more than
4 percent in the Dec. 11-20 timeframe, despite the output reductions.
In addition to its overbuilt housing market, China’s economy has
been roiled by inconsistent but sometimes draconian COVID-19-related
restrictions. The long-lasting restrictions have been lifted this month, which
has led to a COVID-19 infection rate reportedly reaching alarming proportions.