The number of active oil and natural gas rigs in the United States rose 0.6% to 1,984 for the week ending March 16, 2012. The rig count is up 15.3% from the year-ago level and is just 2.1% off the 2011 high of 2,026 for the week ending November 4, 2011.

The highest weekly rig count in the United States since 1940 was recorded on December 28, 1981, at 4,530; the lowest was recorded on April 23, 1999, at 488.

The number of rigs in Canada this week fell 21.1% to 517 from 655 last week, marking the sixth straight decline and ending down 11.7% from the same week last year.

The highest rig count for Canada was 727 on February 3, 2006; the lowest was 29, recorded on April 24, 1992.

Source: Baker Hughes Inc.

While newsletters and press were carrying stories reporting pricing deterioration, only Steel Market Intelligence was ahead of the curve, saying before-the-fact that we expected to see AK Steel raise sheet prices soon earlier this week.

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Contact Brooke at assistant@michelleapplebaum.com.

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According to American Metal Market, Nucor (NUE) is keeping April prices of rebar, merchant bars and beams unchanged following the sideways move in shredded scrap prices.

The move is in line with our expectations as the company has been particularly competitive with pricing in order to ensure domestic market share recently.

Our full report provides further thoughts about domestic and global steel prices as well as the implication for steel equities.

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Steel Market Production Increases – Caspian Stal, a Kazakhstani billet and rebar producer, aims to resume production in April after an extended outage and plans to gradually ramp up close to its nameplate capacity of 150,000 tpy.

Steel Market Production Increases – Turkish pipe producer and cold rolled coil mill Goktas Metal plans to commission its third cold rolling mill in June 2012 and increase its current 210,000 tpy CRC rolling capacity to 300,000 tpy.

Sources: Steel Business Briefing

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AK Steel (AKS) is leading the way in raising sheet prices, announcing a $50/ton increase this afternoon for all carbon sheet products effective immediately.

We had suggested earlier this week that domestic sheet producers were likely to announce a price increase in the next week or two – with AKS being the most likely – due to strong demand, low inventories, seemingly lower imports and higher prices for the imports that are coming in as a result of strengthening global prices.

Our full report provides further thoughts about domestic and global steel prices as well as the implication for steel equities.

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Steel Market Production Cuts – RG Steel plans to idle its No. 4 galvanizing line in Sparrows Point, Md., for about a week in April for scheduled repairs.

Steel Market Production Cuts – Russian steelmaker Severstal plans to produce around 410,000 tonnes of hot rolled steel, 100,000 tonnes of cold rolled steel and 50,000 tonnes of long steel in March, down 10%, 15% and 30%, respectively, from February.

Steel Market Production Increases – Saudi Arabia’s South Steel is close to completing the construction of an electric arc furnace-based billet plant with a capacity of 1 mtpy, as well as a 500,000 tpy rebar mill, and commercial output will begin by July.

Steel Market Production Increases – UAE-based steel producer Emirates Steel Industries (ESI) plans on commissioning its 1 mtpy capacity heavy and jumbo section steel mill by July this year.

Sources: American Metal Market, Steel Business Briefing, Steel Orbis

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Revised January Chinese steel production came in at 1.829 mtpd, 8.9% higher than the China Iron & Steel Association (CISA)’s “flash” and 8.7% higher than December levels, while February output came in at 1.928 mtpd, a whopping 13.7% higher than CISA’s February “flash” and 5.4% higher than January.

February net steel exports declined 23.7% from January to 2.13 mt, the lowest level in a year, as steel exports declined 9.1% to 3.39 mt – also a year low – and steel imports rebounded 34% from January’s record-low.  The decline in China’s balance of steel trade combined with the uptick in production means that the apparent supply of steel in China rose by 8.7% in January and was actually stable in February, as compared to original thinking of a decline of 5%.

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