U.S. raw steel production for the week ending June 27 inched up 0.4% on a week-on-week basis as output rose from steel mills across the nation’s two biggest steel-producing regions – Great Lakes and Southern, according to the latest report from the American Iron and Steel Institute ("AISI").

The gain follows a 1.2% decline for the week ending June 20. Capacity utilization (a key metric in the steel industry) for the reported week showed a modest gain on a weekly comparison basis. But overall year-to-date production still trails that of a year ago.

Per data released by AISI – an association of North American steel makers – domestic raw steel production was 1,733,000 net tons for the reported week with a capability utilization rate of 73.3%, a rise from production of 1,726,000 net tons and capability utilization rate of 73% for the week ending June 20. However, the reported weekly production represents an 8.3% fall from the same period a year ago.

By districts, production from Great Lakes notched up a 0.6% gain on a weekly basis to 622,000 net tons in the reported week. Output from the Southern district – the second-largest steel-producing region – ticked up 1% to 597,000 net tons. Production from North East also went up 3.7% from the previous week to 227,000 net tons. Both Midwest and Western regions, however, saw lower production of raw steel with a decline of 0.5% and 11%, respectively, to 209,000 net tons and 78,000 net tons, respectively.

Adjusted year-to-date production through June 27 came in at 43,570,000 net tons at a capability utilization rate of 72.5%. This represents a 7.4% decline from 47,062,000 net tons recorded in the same period a year ago. Capability utilization rate for the period also fell from 77.3% logged last year.

Per AISI, production capacity for the second-quarter 2015 is roughly 30.7 million tons versus 31.3 million tons a year ago and 30.4 million tons for the first quarter of 2015.

The U.S. steel industry remains hamstrung by depressed capacity utilization and a flood of subsidized imports from countries including China and South Korea. High levels of imports and oversupply in the market are weighing heavily on American steel makers including Nucor (NUE - Analyst Report), U.S. Steel (X - Analyst Report), AK Steel (AKS - Analyst Report), Steel Dynamics (STLD - Snapshot Report) and Commercial Metals Co. (CMC - Snapshot Report).

According to AISI, steel shipments are down 9.5% year over year in the U.S. so far this year. On the other hand, imports continue to make inroads in the domestic market with total and finished steel imports rising 6% and 20% year over year, respectively, during the first five months of 2015. Estimated year-to-date market share of finished steel import is 32%, which is still higher than 28% recorded for full-year 2014.

However, on a positive note, total steel imports are showing a declining trend on a monthly basis. A recent AISI report showed that overall imports of steel products fell for the fourth consecutive month in May, an encouraging sign for the U.S. steel makers. A significant decline in imports from South Korea contributed to the monthly drop.

According to the World Steel Association (“WSA”) – the international trade body for the iron and steel industry – crude steel production slid 8.5% year over year to 6.8 million tons in the U.S. in May, marking the fourth straight month of decline this year.

Although the U.S. steel industry still remains under the threat of cheaper imports in the wake of a stronger dollar, strength in the automotive market and a rebound in construction activity represent tailwinds for the industry. While the WSA foresees steel demand to contract 0.4% in the U.S in 2015, it is expected to rebound to a 0.7% growth next year.