The picture for U.S. steel isn’t looking great in July as raw steel out put is down while the scrap steel market wallows.
U.S. steel continues to suffer in the summer of 2019. While raw steel output drops over the last few weeks, the scrap metal market again slides to a new low for the year.
The price for scrap steel fell slightly more than last month as going into July 2019 the market was down over 1.5%. Sitting at just over $164 per ton, the value of crushed automobile scrap steel is now almost 15% down for the year. While the average scrap price drop was just $3, compared to the same time last year is nearly 24% lower.
Once again the scrap metal market was down relatively evenly across the country. This has been a trend nationwide that we’ve been tracking for a couple months now as the downward pressure on the market has been relatively even. The one region that decreased slightly more than the others in July was Zone 3 (southwest), which was down almost 3% compared to the other four zones.
Industry News: U.S. Raw Steel Production Slips in July
As seen on Yahoo Finance, the latest report from AISI showed the slight decline in production at American steel mills has resulted in the capacity utilization to run below 80%. This important figure in the steel industry is the minimum rate required for sustained profitability. While the U.S. steel industry ran below that threshold for years it broke above it following the steel tariffs last year. However, over the last few weeks falling steel prices have caused U.S. steel companies to idle furnaces and slow down production as market demand has been waning. The capability utilization for last year at this time was a few percentage points lower so while in the past few weeks, U.S. steel output is still above a year ago for now.