Steel Market Production Increases – French pipemaker Vallourec reportedly plans to roll its first seamless pipe this fall at its new 500,000 tpy capacity Youngstown seamless pipe works after having successfully pierced its first billet at the end of June.

Steel Market Production Cuts – Zhu Hongren, a chief engineer at China’s Ministry of Industry and Information Technology (MIIT) confronted China’s problems with overproduction by stating that over the next five years the Ministry will halt excessive capacity expansion, offer support to backwards capacity reductions and slash the number of steelmakers through support of M&A.

Steel Market Production Cuts – ArcelorMittal’s CEO Lakshmi Mittal refused to rule out new European production cuts in the company’s 2Q12 conference call and went on to say that its integrated mill in Florange will remain idled until next year and that its blast furnaces in Gijon, Spain and Dunkirk, France will be down for maintenance during Q3.

Steel Market Production Cuts – German steelmaker ThyssenKrupp’s Steel Europe plans to introduce short-time working hours at its locations in Duisburg-Hamborn, Duisburg-Hüttenheim,Bochum,Dortmundand Siegerland with their Finnentrop location initially excluded.

Steel Market Production Increases – Russian steelmaker NLMK has announced the successful commissioning of its new 3.4 million tpy Blast Furnace No. 7 at itsLipetsksite which along with a new basic oxygen furnace (BOF) will increase crude steel output by 36% to 12.4 million tpy.

Steel Market Production Increases – Egyptian mill Taybah Steel is reportedly hopeful that it will receive a power allocation from the Egyptian government for its new 450,000 tpy capacity electric arc furnace billet plant by the end of the year.

Steel Market Production Increases – Armenian steel producer ASCE Group OJSC has ordered a new 200,000 tpy capacity billet mill from Austrian plantmaker Siemens VAI Metals Technologies that is scheduled for completion in mid-2013.

Sources: Steel Business Briefing, Bloomberg, MetalBulletin, SteelOrbis, SteelGuru, Vallourec Corporate Website, NLMK Press Release

Steel Market Production Cuts – Chinese steelmaker Liuzhou Steel plans to suspend its blast furnace in Guangxi province for 45-50 days for a total loss of 200,000 tonnes of hot metal and to halt HRC, bar and wire rod lines for 15 days starting July 24th with a total output loss of 120,000 -140,000 tonnes of HRC.

Steel Market Production Cuts – Chinese steelmaker Hebei Wu’an Xianjin plans to halt production on a blast furnace for a 3-month overhaul with a total loss of 180,000 – 200,000 tonnes of crude steel over the period.

Steel Market Production Cuts – Chinese steelmaker Taiyuan Steel will be conducting maintenance on one of its HRC lines for 20 days starting in early August with a total output loss of 80,000 tonnes.

Steel Market Production Cuts – Chinese steelmaker Jinan Steel began 5-day maintenance on its HRC line on July 24^th with a total output loss of 25,000 tonnes expected.

Steel Market Production Cuts – Chinese steelmaker Anshan Steel reportedly plans to conduct maintenance on their cold-rolled and HRC lines for 8-10 days in late July.

Steel Market Production Cuts – ArcelorMittal Piombino will idle its Italian operations for the whole month of August and reportedly plans to halve its workforce in September.

Steel Market Production Cuts – Chilean steelmaker CAP Acero has ceased production of cold rolled coils (CRC) at its 100,000 tpy capacity plant in Talcahuano, Chile with production scheduled to resume at the end of the year or or early 2013 according to some sources.

Steel Market Production Cuts – Spanish steelmaker Alfonso Gallardo group’s Corrugados Azpeiia mill in northern Spain has reportedly been idled since mid-June due to a strike despite the company having targeted output at 350,00o tpy during the strike.

Steel Market Production Cuts – Japanese steelmaker Kyoi Steel plans to stop steelmaking and rolling operations for 20 or 21 days this summer.

Sources: Steel Business Briefing, Bloomberg, MetalBulletin, SteelOrbis, SteelGuru

New Report Preview:

Our Advance/Decliner did a dead-cat bounce this week, posting a small increase, driven by an uptick in our Ex-China Index, as our China Index plunged following a sharp drop in iron ore prices… more

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June steel imports declined to 2.59 million tons to the lowest level so far this year, as declining domestic prices narrowed the pricing gap with foreign steel making it less attractively priced… more

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On the AK Steel conference call minutes ago, CEO Jim Wainscott said that the company’s order book was looking “as strong as it’s been in two years” and that the first sheet price increase has held… more

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Steel Market Production Increases – Chinese steelmaker Hanzhong, a subsidiary of Shaanxi has begun production on its new No. 2 converter, bringing the total crude steel production capacity of both converters to 3 million tpy.

Steel Market Production Increases – Italian producer Ilva reportedly plans to restart its hot rolling line No. 1 in September after having idled the facility starting June 10^th due to a poor market environment.

Sources: SteelOrbis

Weekly domestic raw steel production for the week ending July 21, 2012 fell for the third straight week, coming in at 1.837 million tons (mt) – the lowest since November 28, 2011 – and down 0.3% from last week’s 1.843 mt, but up some 0.4% 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 declining as it is right now, the weekly data is actually understating the decline.

Capacity utilization also fell from 75.0% last week to 74.3% this week, the lowest since last December and slightly below the year-ago level of 74.8%.

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