US Steel’s idle furnaces contribute to low September output
US Steel’s idle furnaces contribute to low September output
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The state of the steel and ferrous scrap markets remains mired in a trough entering October, with scrap prices refusing to rebound in September and steel production well below last year’s output levels.
The Washington-based American Iron & Steel Institute (AISI) reports that in the week ending Oct. 1, steel production in the United States checked in at exactly 1.7 million tons. That figure represents a 7.6 percent decrease from the same week in 2021. On a more upbeat note, the most recent week’s output is 1 percent higher than the preceding week (ending Sept. 24).
Year-to-date American steel output of 66.1 million tons is down 4.1 percent from the more than 71 million tons produced in the first nine months of 2021.
In the most recently concluded week, the nation’s mill capability utilization (capacity) rate was 77.1 percent, according to AISI, which is down from 83.3 percent at the same time last year. Year to date, an average capacity rate of 79.6 percent is down from the 81 percent average in the first nine months of 2021.
Steel producers have adjusted their output in different ways throughout the year. This September, Pittsburgh-based United States Steel Corp. made moves to cut back its blast furnace/basic oxygen furnace (BOF) output at two of its locations.
In a mid-September update to investors, the company stated it had pulled forward a planned 30-day outage on blast furnace No. 3 at its Pennsylvania Mon Valley Works complex from October to September. “Work on the blast furnace began on September 3,” the company said, adding that blast furnace No. 3 has “approximately 1.4 million net tons of annual raw steel equivalent capability.”
U.S. Steel also announced it had temporarily idled blast furnace No. 8 at Gary Works In Indiana “due to market conditions and continued high levels of imports.” Blast furnace No. 8 has approximately 1.5 million net tons of annual raw steel equivalent capability, the firm says.
Scrap processors and shippers continue to receive relatively low bids for their scrap thanks to a combination of the restrained domestic demand and a troubling steel sector situation in Turkey (the overseas destination with the largest appetite for exported U.S. ferrous scrap).
In early October, metals information service Davis Index reported that East Coast exporters were uninterested in selling cargoes of the heavy melting scrap (HMS) grade to Turkish bidders, who were offering from $365 to $370 per metric ton for scrap.
Turkish steelmakers are beset with a litany of problems that include a weak Turkish lira contrasting with a strong U.S. dollar, rampant inflation within Turkey’s own borders and diminished demand for Turkish steel that possibly is being supplanted in part by Russian steel seeking new markets in the Middle East.
For scrap processors in the U.S., the combination of factors has led to an early October market where domestic mill buyers are paying an average of $314 per ton for No. 1 HMS scrap. That’s down from an already low $316 monthly average price in September and down steeply from the $420 per ton rate being paid this January, when recyclers were already experiencing falling prices.
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Source: Recycling Today
US Steel’s idle furnaces contribute to low September output
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