Steel Market Production Cuts – U.S. Steel plans to shut down its 2.8 million tpy capacity blast furnace at its Gary Works later this month for maintenance with production scheduled to restart in early October.

Steel Market Production Cuts – Chinese steelmaker Tianjin Tiantie Metallurgical Group has delayed the restart of a 2.5 million tpy hot metal blast furnace until September.

Steel Market Production Cuts – Chinese steelmaker Zenith Steel closed a blast furnace on July 16^th for one month of maintenance that will reduce hot metal production by 90,000 tonnes.

Steel Market Production Cuts– Chinese steelmaker Chongqing Iron & Steel (Chonggang) is reportedly planning to bank one 2,500 cubic meter blast furnace for 40-45 days starting on August 5^th.

Steel Market Production Cuts – Due to the power outages across India’s Punjabstate, steelmakers were ordered to shut down EAFs, furnaces, and rolling mills for three days a week starting July 24^{th _} effectively reducing production by about 80% in an area that produces 12,500 tonnes per day.

Steel Market Production Cuts – Riva, the main rebar producer in France, is planning to suspend production for 4 weeks at the end of this week in an effort to support prices.

Steel Market Production Increase – Sometime this month, Syrian rebar producer Hmisho Steel plans to commission a new 800,000 tpy billet meltshop.

Sources: Steel Business Briefing, SteelGuru

Steel Market Production Cuts – Chinese steelmaker Jinxi Iron & Steel plans to conduct maintenance on its 550 cubic meter blast furnace in August and September for an 80,000-90,000 tonne reduction in pig iron output.

Steel Market Production Cuts – Chinese steelmaker Echeng Steel has stopped production on a blast furnace that will reduce output by 60,000 tonnes per month.

Steel Market Production Cuts– Chinese steelmaker Tonghua Steel is performing maintenance on a blast furnace for seven days that will reduce output by 2,300 tonnes per day.

Steel Market Production Cuts – Chinese steelmaker Shougang is shutting its wire rod production line for maintenance, resulting in lost output of 15,000 tonnes.

Steel Market Production Cuts – Chinese steelmakerAnshan’s subsidiary Anling plans to conduct maintenance on its 2,600 cubic meter blast furnace for 10 days in late August for a 50,000 tonne total reduction in pig iron output.

Steel Market Production Cuts – Italian steelmaker Ilva received an order from prosecutors to partially stop production at their 11 million tpy capacity plant in Taranto, Italy due to pollution from the plant and technicians reportedly entered the plant on Monday to investigate how hot steel production can be shut down.

Steel Market Production Increase – A joint venture between Vallourec and Sumitomo do Brasil has recently opened a new OCTG line with 1 million tpy of crude steel capacity and 600,000 tpy of seamless OCTG capacity.

Steel Market Production Increase – Chinese pipemaker Panyu Chu Kong Steel Pipe has announced the successful production of its first welded pipes from its new 300,000 tpy welded pipe mill.

Steel Market Production Cuts – Commissioning of Al Tanmiya for Steel Industries new 300,000 tpy rebar and 450,000 tpy billet capacity mill and EAF meltshop in Iraq has been delayed from its hoped for July start-up due to insufficient power supply.

Steel Market Production Increase – A private equity group inEgyptplans to re-commission a 250,000 tpy wire and rod mill in November.

Sources: Steel Business Briefing, Metal Bulletin, American Metal Market, SteelOrbis

New Report Preview:

Our Advance/Decliner Index remained stable this week, as a slight increase in our China Index was offset by our Ex-China Index posting a modest drop.  While pricing in China declined for all products with the exception of… more

For a copy of our report and a free trial subscription, please contact us.

In an environment of global overcapacity, Chinese steelmakers have been last to reduce production, continuing to make steel at a breakneck pace despite a slowing economy. As a result Chinese steel prices have plunged 13% in the past three months, while exports have risen 31%.

Finally last Thursday, Beijing broke its silence saying that steelmakers need to “curb production and eliminate backwards capacity due to structural problems and retreating market demand.” Tonight the other shoe has dropped, as Beijing is now leaking to the Chinese press that they are “reviewing” increasing export tax rebates on steel, for the first time since… more.

Our full report is available to subscribers only and provides further thoughts on Beijing’s recent steel industry involvement as well as the potential impact and the implications for steel equities.

For a copy of our report and a free trial subscription, please contact us.

The spot reference price for 62% Fe iron ore cfr North China fell some 7.0% to $116.20 for the week ending July 27, 2012, from $125.00 last week. This marks the third consecutive weekly decline and the lowest price since the week ending December 18, 2009.

For the first quarter of 2012, the iron ore price averaged $141.84, and for 2Q, $139.35; this compares to an average of $176.90 for 1H 2011 and $167.59 for full-year 2011. The post-recession low was $59.10 on March 27, 2009, while the high was $190.19 on February 17, 2011.

Source: The Steel Index

Weekly domestic raw steel production for the week ending July 28, 2012, rose 0.5% to 1.846 million tons (mt) from 1.837 last week and down some 0.6% year-on-year.

We would caution readers that only half of the AISI reporting companies release their weekly production in “real time” so the other half of this data is estimated – using prior months’ reported production & operating rate. What this means is that when the operating rate is rising as it is right now, the weekly data is actually understating the increase.

Capacity utilization also rose from 74.3% last week to 74.7% this week, slightly below the year-ago level of 76.0%.

The lowest production level since the recession began was 800,000 tons for the week of December 27, 2008. The highest level since the recession began was 2.005 mt for the week of May 12, 2012. The lowest capacity utilization rate since the recession began was 33.5% for the week of December 27, 2008; the highest was 81.1% on May 12, 2012.

Source: AISI and Steel Market Intelligence

Steel Market Production Cuts – Chinese steelmaker Shagang has scheduled 20 days of maintenance on a blast furnace which will result in a total output reduction of 150,ooo tonnes.

Steel Market Production Cuts – Chinese steelmaker Taiyuan Iron and Steel plans to idle a blast furnace for 20-23 days for a total output reduction of 100,000-110,000 tonnes of lost output.

Steel Market Production Cuts – Chinese steelmaker Nangang has idled a small 40-50,000 tpm blast furnace starting July 25^th with no restart date given.

Steel Market Production Increases – Gerdau Special Steel North America announced that it launched the second phase of its special bar quality (SBQ) expansion at itsMonroe,Michiganlocation with the intent of increasing capacity to 800,000 tpy by 2Q13.

Steel Market Production Cuts – Italian steelmaker Riva Group’s Ilva integrated mill, the largest inItaly, is reportedly facing a potential closure over legal documents filed this week regarding pollution from the 11 million tpy capacity mill.

Steel Market Production Cuts – Swedish Steelmaker SSAB plans to halt production at its operations for three weeks over the summer months which will result in the loss of 120-150,000 tonnes of strip products and 30-40,000 tonnes of plate.

Steel Market Production Cuts – Argentinean producer Acindar plans to reduce wire rod output over an initial period of 5 months due to depressed domestic demand.

Steel Market Production Increases – Turkish steelmaker Tosyali Holding is currently gradually restarting its Montenegrin special steel and bar producer Zeljezara Niksic’s EAF with its hot rolling mills scheduled for a restart next week.

Sources: Steel Business Briefing, Gerdau Press Release