Steel Market Production Cuts – Gerdau Long Steel North America is planning a 10-day outage beginning at the end of July at its 800,000 tpy crude steel capacity Sayreville NJ plant which has a 600,000 tpy rolling capacity of rebar, angles, flats, squares and handrails.

Steel Market Production Cuts – ArcelorMittal told reporters today that it is reviewing its European flat carbon operations due to poor economic conditions – with trading sources commenting that they could easily shut down three more blast furnaces inEurope.

Steel Market Production Cuts – Last Friday, ArcelorMittal began idling its 1 million tpy crude steel capacity hot strip mill inOstrava,Czech Republicwith an unspecified restart date that will depend on market demand. Before the outage the mill had been running at 30% capacity.

Steel Market Production Cuts – Some steelmakers inEuropehave reportedly been considering extending their summer stoppages by a few extra days or a week according to a source at European steel association, Eurofer.

Steel Market Production Cuts – Workers at Evraz’s South African subsidiary Highveld Steel have begun striking against potential retrenchments amidst the company being in the process of stopping production at the 1 million tpy crude steel capacity Witbank Plant.

Steel Market Production Cuts – Belarusian steelmaker BMZ has suspended production of its new 600,000 tpy HRC rolling mill.

Steel Market Production Increases – European steelmaker Vorskla Steel hopes to restart its Danish mill, VorsklaDenmark, by March of 2013 when it completes its capacity expansion on the meltshop which will lift total capacity to 800,000 tpy from 500,000.

Sources: Steel Business Briefing, American Metal Market, SteelOrbis, The Citizen

The spot reference price for 62% Fe iron ore cfr North China fell some 1.7% to $132.80 for the week ending July 13, 2012, from $135.1o last week. The price of iron ore has been relatively stable for the past two months now, trading in a range of $130-140/tonne.

For the first quarter of 2012, the iron ore price averaged $140.37, and for 2Q, $142.63; this compares to an average of $178.22 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

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June steel distributor inventory/shipment data will be released at 8am on Tuesday morning, and we expect to see a decline in overall inventories and relatively strong MSCI shipments as two opposing forces come to bear – worries about falling steel prices will likely keep inventories lean, and reasonably healthy end-user demand should keep shipments up.

Our full report is available to subscribers and provides further thoughts regarding our outlook for June distributor shipments and inventory data as well as implications for steel prices and equities.

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Steel Market Production Increases – Gerdau plans to begin operations at a new continuous caster at itsMonroe,MImill next month.

Steel Market Production Increases – Nucor plans to install a new reheat furnace at itsWallingford,Conn.rolling mill that will increase capacity to 300,000-350,000 tpy of rebar, wire rod and wire mesh from 250,000 when it is completed in July 2013.

Steel Market Production Cuts – ThyssenKrupp will likely be cutting working hours at its German operations by mid-August according to a workers representative

Sources: Steel Business Briefing, American Metal Market

The number of active oil and natural gas rigs in the United States fell 0.6% to 1,953 for the week ending July 13, 2012, down from 1,965 last week.  The rig count is still 2.5% above the year-ago level.

The highest weekly rig count in theUnited Statessince 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 again this week by 12.1% to 296 compared with 264 last week and the highest count since March 23, 2012.  Despite the increase, the count is down 24.9% from the year-ago level.

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

Source: Baker Hughes Inc.

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Contrary to CISA’s June production estimate showing a nominal monthly drop, official June output came in at 2.01 million tonnes per day (mtpd), up 1.6% from May, to the second highest of all-time, and just 0.6% shy of April’s all-time record.

The uptick in Chinese production in the face of waning steel demand is disconcerting as steelmakers have continued to ship overproduction around the globe, resulting in June net Chinese steel exports rising 5.4% to a two-year high of 4.09 mt.

While Beijing’s multiple stimulus-attempts are good news longer-term for steel in China, in the short term, we believe that stimulus announcements are backfiring, keeping production too high, as steelmakers wait for promised new orders to come in as they continue to lose money.

Our full report is available to subscribers only and provides further thoughts on June Chinese steel production and the implications for steel equities.

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Our Advance/Decliner Index gained for the second straight week, increasing from 26% to 34% (but still below the key 50 level meaning more price decreases were announced than increases) as domestic steelmakers raised sheet prices and Brazilian steelmakers raised steel prices across-the-board due in part to the weakening real against the dollar.  Pricing strength seen in the MENA region last week proved fleeting, while pricing in East Asia weakened on the heels of continued export price cuts out of China.

Our China Index rose from zero to 11% as just one price increase was recorded during the week despite Beijing announcing the second interest rate cut in less than a month.  Spot prices in China have continued downward so far this week, as we think the marketplace is viewing the rate cut as an indicator of a real downturn in the economy – and a negative this time around – rather than a positive.

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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Steel Market Production Cuts – Korean steelmaker Dongkuk has begun summer maintenance seven days early at its EAF based Incheon works due to an accident – the outage had previously been scheduled for July 17-27.

Steel Market Production Cuts – Tata steel’s strip unit in the UK has announced that it will take some production pauses at its facilities in Port Talbot and Lainwern, Wales over the summer.

Steel Market Production Increases – Chinese pipemaker Zhengzhou Jinghua Welded pipe plans to commission a new 520,000 tpy production capacity electric resistance welded (ERW) pipe plant by the end of July.

Steel Market Production Cuts – Czech plate and sections producer Evraz Vitkovice will be halting production for almost a month starting July 17^th due to a planned interruption of the hot metal supply from ArcelorMittal Ostrava.

Steel Market Production Cuts – Central Trinidad Limited (Centrin) has extended its 30-day shutdown until August 17 at its 120,000 tpy plant citing an inability to find buyers for its excess inventories after it lowered prices.

Sources: Steel Business Briefing