Steel Market Production Cuts – An Italian Court reportedly ordered the stoppage of raw materials being shipped to Ilva’s the 11 million tpy capacity steel plant in Taranto, Italy – the company reportedly has enough raw materials on hand to run for 15-20 days.

Steel Market Production Increases – Chinese steelmaker Angang will be commissioning a new 1.6 million tpy special steel mill in November of this year.

Steel Market Production Cuts – Chinese steelmaker Jiyuan has been ordered byChina’s Ministry of Industry & Information Technology (MIIT) to eliminate 800,000 tpy of steelmaking capacity through the shutdown of two converters.

Steel Market Production Cuts – Chinese steelmaker Tianli has been ordered by China’s MIIT to permanently shutter its 300,000 tpy blast furnace.

Steel Market Production Cuts – Chinese steelmaker Fulong has been ordered by China’s MIIT to eliminate 300,000 tpy of steelmaking capacity through the shutdown of two EAFs by December of this year.

Steel Market Production Increases – Ukrainian steelmaker Alchevsk plans to increase its output of crude steel in September by 10% compared to August to around 321,000 tonnes.

Sources: Steel Business Briefing, SteelOrbis

Weekly domestic raw steel production for the week ending September 8, 2012 fell 2.8% to 1.811 million tons (mt) from 1.864 mt last week and was down 3.1% 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 production is changing, the weekly data is actually understating the change.

Capacity utilization fell to 73.3% this week, below the year-ago level of 76.4% and the lowest since last November.

The lowest production level since the recession began was 800,000 tons for the week of December 27, 2008, while the highest level 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

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The spot reference price for 62% Fe iron ore cfr North China fell 0.4% to $89.00 for the week ending September 7, 2012, the lowest level since the week ending October 30, 2009. Iron ore prices have now fallen for five straight weeks for a total decline of 23.7% over that time period.

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