Steel Market Production Increases – SSI UK’s steelmaking operation on Teesside in northeast England has produced its first slabs since its furnace was relit over the weekend. The company expects to achieve a production rate of 3.6 million tpy of slab for shipment to SSI’s rolling operations in Thailand.

Steel Market Production Increases – Meigang, a sister company of Baosteel has begun a trial operation of its number 3 casting line at its new Nanjing steelworks. The location’s number 4 continuous casting line is slated to begin trials in May – which together with the number 3 line would increase the company’s billet capacity by 4.1 million tonnes per year.

Steel Market Production Increases – Turkish steelmaker Erdemir plans to install a new cold rolling mill at its Eregli works in Malatya and intends to increase its tin plating capacity by an unspecified amount as well.

Steel Market Production Increases – Spanish steelmaker Grupo Hierros Añon has obtained a preliminary license for the steelworks it intends to build in the northern Brazilian state of Ceará. The facility is expected to begin initial production in the first half of 2013 with an eventual capacity of 2 million tonnes per year.

Steel Market Production Increases –Shanxi Province-based Chinese steelmaker Zhashui Tongxin Rolled Steel Co. has begun construction on steel plate and bar facilities that will have production capacities of 400,000 and 300,000 tonnes per year respectively. The facilities are expected to be commissioned at the end of September this year.

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

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After trading in a tight range of 71-74% over the last month, our Advance/Decliner Index dropped from 74% to a two-month low of 63% this week (any reading over 50 means that the number of price increases exceeded the number of declines).

The decline was driven by our Ex-China Index falling from 73% to 58% as pricing showed less strength in the Middle East and weakened in Europe and the CIS.  Our China Index was unchanged at 75% as Chinese steelmakers raised domestic prices for some steel products and increased export prices as well.

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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The American Institute of Architects’ (AIA) ABI Index – a leading economic indicator of non-residential construction activity 9-12 months into the future – posted a reading above 50 for the fifth successive month in March, coming in at 50.4, modestly below February’s 51.0 (any reading higher than 50 means the number of architects reporting “rising billings” outpaced the number reporting “declining billings”).

The new project inquiry index declined sharply in March, falling 6.8 points to 56.6, down from February’s 63.4, which was the highest level since July 2007.

Some highlights in the report included both the Commercial/Industrial Index and the Northeast Index hitting more than four-year highs during the month.

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Steel Market Production Increases –ArcelorMittal’s new $60m production line for heat-treated plate products in Burns Harbor, Indiana began production earlier this month.

Steel Market Production Increases – China’s Tangshan Iron and Steel, a subsidiary of Hebei has begun construction on a 1.3 million tonnes per year ERW pipe plant in Tangshan city.

Steel Market Production Increases – German-based large-diameter pipe producer Europipe has resumed production at its Mulheim an der Ruhr works and its 200,000 tonne per year pipe mill in northern France.

Steel Market Production Increases – Iraqi rebar producer G.K. Steel has installed a new induction furnace. The furnace takes the company’s total finished production capacity to 80,000 tonnes per year.

Steel Market Production Increases – Chinese line pipe maker Shengli has entered into a joint venture agreement with pipe distributor IRI De Colombia to manufacture and distribute OCTG and SSAW pipes to the US market. The operation will reportedly have a capacity of 150,000 tonnes per year of both OCTG and SSAW pipe.

Steel Market Production Cuts – Turkish integrated flat steelmaker Erdemir began relining the No. 2 furnace at its Eregli works in Northern Turkey yesterday. The relining of this furnace will take 1.8 million of Erdemir’s 9 million tonnes per year of liquid steelmaking capacity offline for 90 days.

Sources: Steel Business Briefing, NWITimes

Weekly domestic raw steel production rose 0.9% to 1.975 million tons (mt) for the week ending April 14, 2012, a post-recession high and up some 8.6% compared to the year-ago level.  The lowest production level since the recession began was 800,000 for the week of December 27, 2008.

The capacity utilization rate climbed to 79.9% compared to 79.2% last week and was higher than the year-ago level of 74.3%.  Like weekly production, capacity utilization came in at the highest level since the recession began.  The lowest capacity utilization rate since the recession began was 33.5% for the week of 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

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Driven by weakening flat-rolled volume (down 1.7% versus a normal seasonal increase of 2.7%), March MSCI shipments declined 0.5%, bucking the normal seasonal trend of a 2.3% uptick.

While total inventories in tons declined a modest 0.4%, flat-rolled inventories rose 0.7% while all other products showed declines of 1.2-4.7%.

Overall months’ supply (MOS) declined to 2.3 in March from 2.4 in February due to one extra shipping day, but would have been flat at 2.4 if the number of business days in the month were adjusted.

Our full report is available to subscribers and provides further thoughts on March distributor shipments and inventories by product as well as implications for steel equities.

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Steel Market Production Cuts – According to the China Iron & Steel Association, China’s daily steel output fell by 1.5% in the last ten days of March compared to the previous ten days. During this period there were at least five major steelmakers under maintenance.

Steel Market Production Cuts – Italian longs producer Leali has announced that it is permanently idling its rebar rolling mill at Roe Volciano. The 400,000 tpy capacity mill has been idled since early 2011.

Steel Market Production Cuts – Lebanon’s only steelmaker Kfoury Metals has suspended production due to the high cost of fuel oil used to operate its captive power plant. The producer has 180,000 tpy billet capacity that is used to supply its 400,000 tpy rebar mill.

Steel Market Production Increases – Chinese seamless pipe producer Anhui Tianda Oil Pipe plans to double capacity at its 300,000 tpy high-grade seamless plant by the end of 2012. This move would bring the company’s total seamless capacity to 950,000 tpy.

Steel Market Production Increases – Saudi Steel Producer SABIC is close to completing construction of its new long product works. The new facility will have 1 million tonnes per year of EAF-based billet capacity and a 700,000 tpy wire rod mill.

Sources: Steel Business Briefing, MetalBulletin