Steel Market Production Increases – US Steel has commissioned a new quench and temper line at its seamless pipe mill in Lorain, Ohio. The new line will have a production capacity of 264,000 tpy.

Steel Market Production Increases – Chinese steelmaker, Xilin Steel has announced that its 1,260 cubic meter blast furnace will be commissioned in early April. The blast furnace has a designed capacity of 1.02 million mt.

Sources: American Metal Market, SteelOrbis

The number of active oil and natural gas rigs in the United States remained unchanged at 1,979 for the week ending April 5, 2012. The rig count is up 11.1% from the year-ago level and is just 2.3% 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 fell 27.0% to 187 this week from 256 the week before, marking the ninth straight decline. The drop puts the rig count 2.1% below the year ago period.

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.

Steel Market Production Increases – Al Tanmiya for Steel Industries is hoping to commission its new long product steelworks in Iraq by July. The new EAF facility will have 300,000 tpy rebar and 450,000 tpy billet capacity.

Steel Market Production Increases – Nova Steel has upgraded its Montreal tube mill with two new standard and structural lines. The smaller of the two mills is expected to come online in late 2012 and the larger is expected to go live in the first quarter of 2013.

Steel Market Production Increases – SSAB’s plate rolling operations at its plant in Oxelösund, Sweden are expected to restart this week after an outage caused by an incident that disrupted power to the plant on March 24^th.

Sources: Steel Business Briefing

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Nucor (NUE) is following ArcelorMittal (MT)’s recent $20/ton sheet price increase effective immediately, according to trade press.  The difference in these two price increases is that Mittal’s original increase was a “firm” $700/ton so that their $20/ton brings the HRC price to $720. Nucor’s pricing move is an increase of $20/ton but Nucor doesn’t publish a “firm” sheet price.

While there will be a great deal of debate on exactly where HRC prices are today, we would point out two things – first, Nucor has rarely, if ever, announced a sheet price increase that has not mainly stuck. Second, same thing with ArcelorMittal.

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 – Czech plate and sections producer Evraz Vitkovice Steel shut down its heavy sections mill on March 31 due to a lack of demand for long products. The mill has an annual capacity of 120,000 tpy, representing 10% of Evraz Vitkovice Steel’s total capacity.

Steel Market Production Increases – Workers at Schnitzer Steel subsidiary, Cascade Steel Rolling Mills have returned to work today after a Monday evening walkout that was unauthorized by the United Steelworkers Union. The Cascade Steel Rolling Mills have an annual production capacity of approximately 800,000 tpy.

Sources: Steel Business Briefing, American Metal Markets

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During Ternium’s March Investor Day held recently, management detailed strategic plans, including the company’s expectation to capitalize on growing Latin American steel demand through the Usiminas deal.

The combined entity will be the leading player in Latin America, according to the company, and Ternium is looking to grow further through both upstream and downstream expansion.  Like some of its industry peers, TX is also seeking to take advantage of inexpensive natural gas prices, with the potential construction of a DRI-based steel mill.

Our full report is available to subscribers only and provides further thoughts on Ternium’s March Investor Day as well as the implication for the stock and other equities.

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Steel Market Production Cuts – Workers at Cascade Steel’s Rolling Mills, a subsidiary of Schnitzer Steel Industries Inc., are reportedly poised to go on strike due to the failure in negotiating a new contract covering some 300 United Steelworkers. According to the Union, the company has been given a 72 hour strike notice which has the potential to halt production at the 800,000 tpy mill.

Steel Market Production Increases – Baoji Petroleum and Steel Pipe Company subsidiary Liaoyang Steel Tube has started production at its new welded pipe facility in Liaoyang. The facility has a production capacity of 150,000 – 200,000 mtpy of spiral welded pipe.

Sources: SteelOrbis, American Metal Market

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Our Advance/Decliner Index posted another small decline this week, dropping to 71% from last week’s 73% and 74% recorded two weeks ago (any reading over 50 means that the number of price increases exceeded the number of declines).

Our China Index was the driver of the small overall drop as the reading declined from the mid-August 2011 high of 92% seen last week to 55% as pricing for steel products was mixed during the week.  Improved pricing in East Asia, the CIS and Europe lifted our Ex-China Index from 68% to 76%, nearly offsetting the downturn in China.

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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Weekly domestic raw steel production dropped 2.4% to 1.900 million tons (mt) for the week ending March 31, 2012, but was up 4.9% against the year-ago level. The highest production since the recession began was 1.959 mt on March 10, 2012, while the lowest was 0.8 mt on December 27, 2008.

The capacity utilization rate also posted a decrease, coming in at 76.9% compared to 78.8% last week, but was higher than the year-ago level of 74.1%. The highest capacity utilization rate since the recession began was 79.3% on March 10, 2012, while the lowest was 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.

Source: AISI and Steel Market Intelligence