Steel Market Production Cuts – ArcelorMittal’s 1.8 mtpy capacity coil plant in Sestao, northern Spain, is expected to continue to be idled during March, due to minimal scrap purchases in the last two weeks.

Steel Market Production Cuts – Moldova Steel Works’ (MMZ), which has been idle for the last two months, should have resumed production in the past few days, but its restart will be delayed for a few more weeks due to scrap procurement issues.

Sources: Steel Business Briefing

Steel Market Production Cuts – Luxembourg-based steel producer ArcelorMittal has extended the temporary idling of two blast furnaces at its Florange site in eastern France due to poor demand and slower than expected recovery.

Steel Market Production Increases – Mechel, the Russia-based metal and mining company, has resumed the operations at three out of its four mills in Romania, and production at the remaining plant, Targoviste is due to restart on February 27^th.

Steel Market Production Increases – Vallourec SA is nearing completion of its new 500,000 tpy seamless pipe mill in Youngstown, Ohio, with the mill on schedule to restart commercial production this summer as it ramps up to the targeted capacity.

Steel Market Production Increases – Vietnam’s SSE Steel is defying difficult market conditions to bet on the future of the construction sector in Vietnam by adding 350,000 tpy of new rebar and wire rod capacity by the end of 2012.

Sources: American Metal Market and Steel Business Briefing.

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After falling to a 10-week low of 49% last week, our Advance/Decliner Index rebounded to 66% as steel prices strengthened in the MENA region on the back of higher scrap prices, pushing our Ex-China Index up to 71% from 50%.

Our China Index remained mostly stable at 50%, compared with 46% the week prior.  The Chinese market is still treading water – with some increases here and there, but just as many decreases.  We suspect the usual post-holiday pickup is not yet appearing largely because the holidays were so early this year and winter is still blunting construction demand.

Our full report provides further thoughts about global steel pricing trends and our outlook as well as implications for steel equities.

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The American Institute of Architects’ ABI Index – a leading economic indicator of non-residential construction activity 9-12 months into the future –  remained above 50 in January, coming in at 50.9, virtually unchanged from 51.0 in December, and the first three-month string of readings above 50 since last spring.  The reading above 50 means the number of architects reporting “rising billings” outpaced the number reporting “declining billings.”

The new inquiries index remained near a four and a half year high at 61.2, while six out of the eight sub-indices posted readings above the 50 mark, indicative of billings growth.

Our full report is available to subscribers and provides further thoughts on the January ABI Index as well as the impact on steel equities.

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January global steel production rose a less than seasonally normal 0.9% to 116.7 million tonnes (mt), compared with the typical monthly gain of 2.5%, as Chinese production fell by 0.2% and output in South Korea dropped 13.9%.  Production was down some 7.8% compared with year-ago levels as production in Asia and the EU were down some 11.4% and 5.6%, respectively, with China posting the largest year-on-year decline – at 13.0% – since October 2008.

Production in the EU rose a seasonally-normal 11.9% driving the overall gain, while US production increased for the third straight month to the highest level since September 2008.

Korea also posted a significant year-over-year decline of 9.6%, which was unexpected given the additional steelmaking capacity Korean steelmakers have brought online.  The decline is good news for the US market which saw a 39% increase in imports from Korea in 2011.

Our full report is available to subscribers only and provides further thoughts on global steel production and pricing and the implications for steel equities.

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Steel Market Production Cuts – Steelmaking operations at China’s Angang Heavy Machinery (AHM), one of China’s largest machine manufacturers, have been idled indefinitely after an explosion on February 20^th that has left 13 workers killed and 17 injured. The cast steel plant involved in the incident has a 450,000 tonnes/year EAF and is capable of producing 30,000 t/y of steel castings, 100,000 t/y of ingots and 280,000 t/y of steel billet, according to company data.

Steel Market Production Cuts – The Sparrows Point, Md.-based steelmaker, RG Steel LLC, has temporarily idled its 4,000 tpd blast furnace at its Warren, Ohio, steelmaking complex following a Saturday morning tuyere failure, and the company expects the repairs to take about a week.

Steel Market Production Cuts – Turkish steel producers’ association (DCUD) expects February production to fall below January figures because of electricity and natural gas cuts that have affected steel production since the beginning of February.

Steel Market Production Increases – Argentinean longs producer Acindar’s expansion plan is progressing well as the company – controlled by global steel giant ArcelorMittal – prepares to make an extra 25,000 tonnes/year of special bar quality (SBQ) products in the short to medium term.

Steel Market Production Increases – Colombia’s steel industry may record 5% growth this year and reach 1.82m tonnes of production as a result of investments made by domestic and foreign steelmakers.

Steel Market Production Increases – Russia’s NLMK is conducting hot trials on a second 2m tonnes/year ladle furnace (LF), and the fourth LF in total, at its steelworks in Lipetsk, and the company expects to bring its combined ladle furnace capacity to 12 mtpy shortly.

Steel Market Production Increases – Tata Steel expects to complete the installation of two roller hearth furnaces at its thin slab casting and rolling plant at its integrated works in Jamshedpur (India) by the end of the first quarter of 2012. Both the furnaces have a reheating capacity of up to 280 tonnes/hour of slab.

Steel Market Production Increases – Korea’s Dongkuk Steel Mill expects capacity utilization at its heavy plate facilities to return to normal from next month after conducting output cutbacks since last December as it foresees plate demand recovering steadily after the first quarter.

Steel Market Production Increases – According to the latest survey by China Iron and Steel Association (CISA), China’s daily crude steel output is expected to increase by 1.9% to 1.7045 mt in early February as steel traders replenish their stockpiles following the Lunar New Year.

Sources: Steel Business Briefing, American Metal Market, Arab Steel, and Mysteel.

Weekly domestic raw steel production increased for the third successive week, rising 0.7% to1.942 million tons (mt) for the week ending February 18, 2012, and increasing 6.7% from the year-ago level.  The highest production on record dating back to 2004 was 2.215 mt on May 13, 2006; the lowest was 0.8 mt on December 27, 2008.

The capacity utilization rate continued a three-week uptrend as well, increasing from 78.1% last week to 78.6% this week, and surpassing the 75.3% rate recorded a year ago. However, this is below the 94.7% rate recorded on January 15, 2005.  Capacity utilization hit a low of 33.5% on December 27, 2008.

Note: AISI weekly production data only includes real-time input from 50% of producing members; the remainder of the data is a guesstimate based on each company’s prior-month production and therefore the weekly AISI data lags when there are production cuts or increases going on.