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According to the Steel Import Monitoring and Analysis (SIMA) licensing program, June steel import licenses declined 4.9% to 2.54 million tonnes (mt) from May’s 2.67 mt.  The overall decline was driven by weakness in the sheet market, as total sheet imports dropped 12.8% from May’s level, and are now down 26.3% from a multi-year high in April.  Semi-finished licenses bucked the overall downtrend, rising a modest 4.4%, as Brazilian semi-finished tonnage jumped some 81.7% in June, following a 41.8% fall to a year low in May.

Bucking the overall downtrend, June Chinese imports are poised to potentially reach the highest level since early 2009 (just before the huge Chinese oil pipe case was filed), while Korean tonnage looks set to increase 9.4% from May levels to near record levels.

Our full report is available to subscribers and provides further thoughts on June import licenses as well as our outlook for the coming months and implications for steel equities.

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Steel Market Production Cuts – The Serbian Government has announced a change in plans for the 2.4 million tpy capacity Zelezara Smederevo plant, with the No. 2 BF at the plant now scheduled to be closed from July 10 until September 1.

Steel Market Production Cuts – German Steelmaker ThyssenKrupp is reportedly considering cutting work hours at its German operations in light of slowing steel demand.

Steel Market Production Increases – Mexican bar and sections producer Simec has begun production on a new plant in Sao Paolo, Brazil with some 500,000 tpy wire rod and rebar capacity that is scheduled to begin operating in 2013.

Sources: Steel Business Briefing, Reuters

Steel Market Production Cuts – Japanese steelmaker JFE plans to cut H beam production by 10% for the months of July through September from April through June.

Steel Market Production Cuts – Chinese steelmaker Xinyu Iron & Steel will be performing maintenance on its HRC and plate production line in July for a total lost output of 80,000 to 100,000 tonnes.

Steel Market Production Cuts – Chinese steel producer Shougang Changzhi began maintenance on its H beam production line on June 28 with production slated to fall by a total of 15,000 tonnes over the course of the 8 day outage.

Steel Market Production Cuts – Gerdau Long Steel North America shut down its steel mill in Jacksonville, FL on Tuesday of last week due to flooding from Tropical Storm Debby though production at the rolling mill and EAF was able to restart on Thursday.

Steel Market Production Increases – Italian plantmaker Danieli group is planning to quickly restart production at the 120,000 tpy Croatian seamless pipe  mill, Zeljezara Sisak that they purchased recently purchased from Commercial Metals Company.

Sources: Steel Business Briefing, SteelGuru, Commercial Metals corporate website

Weekly domestic raw steel production rose by 1.5% to 1.881 million tons (mt) for the week ending June 30, 2012, breaking a string of six weekly consecutive declines since the post-recession high of 2.005 (mt) reached on May 12, 2012 and up some 1.5% compared to the year-ago level.  The lowest production level since the recession began was 800,000 for the week of December 27, 2008.

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 business is improving or deteriorating, the weekly data has a meaningful lag.

Capacity utilization also rose from 75.0% last week to 76.1% this week and higher than the year-ago level of 75.8%.  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.

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