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Our Advance/Decliner Index rose slightly from last week’s level. The increase was driven by strength in European pricing as production cuts – most notably… more.
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For the week ending December 1, 2012, weekly domestic raw steel production fell 0.9% to 1.802 million tons (mt), compared to the 10-week high of 1.818 mt recorded the previous week, but is still up some 7.3% from the recent low of 1.679 mt for the week of October 27, 2012.
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 the last month’s reported production & operating rate. What this means is that when production is changing, the weekly data is actually understating the change.
Capacity utilization came in at 72.9%, down from 73.6% last week and down from the year-ago level of 74.3%.
The lowest production since the recession began was 800,000 tons for the week of December 27, 2008, while the highest 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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Rebounding to the 2nd highest in over two years, November Chinese steel exports jumped 6.3% to million tonnes (mt) from 3.79 mt in October. We believe… more.
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The number of active oil and natural gas rigs in the United States fell again this week – declining by 11 to a 19-month low of 1,800 for the week ending December 7, 2012 – down 0.6% from last week and 9.4% from a year ago.
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 rose for the fourth consecutive week – up 1.8% to 406 from 399 last week, but 19.4% below the year-ago level.
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.
HRC lead times rose again for the week ending December 2 to a three-month high of 3.9 from last week’s 3.5 and 3.1 two weeks ago.
HDG lead times also rose – coming in at a 14-week high of 6.6 weeks from 6.3 in the week prior. CRC lead times posted the lone decrease, falling to 6.0 from last week’s 11-week high of 6.4.
Sources: The Steel Index, Steel Business Briefing
HRC = Hot Rolled Coil CRC = Cold Rolled Coil HDG = Hot Dipped GalvanizedNew Report Preview:
November steel import licenses dropped 6.0% from October levels to 2.3 million tonnes, driven by meaningful declines for key products such as hot-rolled sheet (-26%) …more
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The spot reference price for 62% Fe iron ore cfr North China declined for the second straight week, falling 2.8% to $115.60 for the week ending November 30, 2012, and is at the lowest level in six weeks. However, the price is still some 29.9% higher than the recent low of $89.00 on 9/7/2012.
The spot price for iron ore averaged $141.84 in 1Q, $139.35 in 2Q, and $112.12 in 3Q; this compares to an average of $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
The number of active oil and natural gas rigs in the United States fell for the first time in a month – declining by 6 to 1,811 for the week ending November 30, 2012 – down 0.3% from last week and 9.1% from a year ago.
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 rose for the third straight week – up 3.1% to 399 from 387 last week, but was 17.6% below the year-ago level.
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 – China Steel Corp plans to begin production at the new 1.2 mtpy Vietnamese CRC JV by year-end 2013 and it will have capacity for 300,000 tpy of hot-dipped galvanized, 200,000 tpy of NGO silicon steel, and 300,000 tpy of pickled and oiled.
Steel Market Production Increases – Thai steelmaker G Steel believes it is close to receiving financing for a “raw material supply facility” that will allow it to re-start HRC production at its 1.8 mtpy Rayong facility and 1.5 mtpy GJ subsidiary in Chonburi. The company estimates that it will restart production in February and will ramp-up to full production over four months; the plants have been idled since early August.
Steel Market Production Increases – Chinese steelmaker Baogang has plans to upgrade the efficiency of its wide hot strip mill No. 1 at the Baoshan facility in Shanghai by installing a new descaler by mid-2013, with a sizing press and roughing stand scheduled for mid-2014.
Steel Market Production Cuts – Vietnam-based Pomina Steel Corp announced that the “Pomina 3” project for a new longs rolling mill is now on hiatus. Pomina has 1.5 mtpy of billet capacity after commissioning a new plant in March, but only has 1.05 mtpy of rolling capacity. While the long-term goal remains to build a plant that would close the capacity gap, Pomina will sell the excess billet until that plan is feasible.
Sources: Steel Business Briefing
