STEEL PRODUCTION LOOKING FOR STABILITY IN 2017
Post Date: 09 Jan 2017 Viewed: 641
Steel production in the United States fell slightly in 2016.
U.S. Steelmakers produced 87.9 million tons of steel in 2016, a 0.5 percent decline from the 88.4 million tons made in 2015, according to data from the American Iron and Steel Institute (AISI). Steelmakers used about 70.8 percent of their steelmaking capacity last year, up from 70.1 percent in 2015.
Raw steel production in the Great Lakes fell to 647,000 tons last week, a 5,000 ton decrease from the previous week.
The complete turnaround from a dismal 2015 has been slow to come, but not unexpected by the industry.
Lourenco Goncalves, CEO of Cliffs Natural Resources, said in October that an inventory of illegal steel was being cycled out of the system, and once it’s used up, American producers will be first in line when companies need to replenish.
“If you buy dumped steel, you are buying illegally imported stuff,” he remarked in the fall. “There’s a lot of illegal stuff in the system still — prices are still artificially low — [the rebound] will be soon.”
Soon, he expected, would be in 2017, due in large part to recent federal tariffs on imported steel. And the industry is showing a few signs of that production uptick.
The half-percent decrease in 2016 pales in comparison to the 10.5 percent drop in U.S. steel output from 2014 to 2015, which led to the industry crisis.
U.S. Steel’s recent decision to reopen Keewatin Taconite in 2017 is widely viewed as a sign of stabilization in the steel market. The Keetac plant, idle since May 2015, joined Cliffs’ operations at Northshore and United Taconite as surefire indicators of the turnaround.
Still, overall steel output fell by 44,000 tons last week to 1.592 million tons, a decrease of 2.68 percent, according to the AISI, and capacity use sits well below the 90 percent benchmark analysts consider a healthy market.
But steel producers running Iron Range plants are confident President-elect Donald Trump can help turn the tide, whether through infrastructure spending or by cutting costs through less stringent regulations.