SMU Analysis: What Does AISI Production Data Say About Unused Capacity?

Steel Market Update was contacted this week by an analyst who questioned the accuracy of the American Iron and Steel Institute data published by SMU. He wondered how AISI calculates its weekly mill capacity utilization rates and whether their calculations account for idled furnace capacity. A close look at the AISI data shows the domestic steel industry has a lot of unused capacity.

AISI reported raw steel production of 1.747 million tons for the week ending Feb. 3 at 75 percent capacity utilization. Doing the math, that suggests the industry could theoretically produce 2.33 million tons per week at 100 percent capacity or more than 121 million tons per year. Last year, the industry produced about 90 million tons. SMU’s analysis shows that AISI data does reflect mill capacity additions and closures.