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Producers’ industrial output, capacity utilization increase

Keywords: Tags  industrial production, capacity utilization, metals industry, iron ore, steel, scrap, metallurgical coal, metals shipments new orders



CHICAGO — The U.S. primary metals industry logged both industrial production index and capacity utilization gains in December, rising by 2.8 points and 2.1 points, respectively, from November, according to data from the Federal Reserve Board.

Activity levels among regional steel, scrap, metallurgical coal and iron ore producers were mixed last month, the Fed said Jan. 16 in its Current Economic Conditions report.

Metal fabricators had a capacity utilization rate of 83.4 percent in December, down slightly from 83.6 percent a month earlier, while the production index was unchanged at 94.3.

The mining industry saw capacity utilization and the production index rise to the highest levels of the year, to 91.9 percent and 116.3, respectively.

In the Cleveland banking district, steel producers and service centers described shipping volumes as lower relative to levels seen in the third quarter. Raw materials prices were either flat or trended lower than in the prior survey.

In the Chicago district, steel mill capacity utilization increased slightly and service center inventories were said to be at desirable levels. Specialty metals manufacturers reported a decline in quoting and new orders as customers continued to delay purchases until the last minute.

Scrap exports were strong, survey respondents at U.S. ports told the Fed. In the San Francisco banking district, demand for scrap metals remained somewhat weak by historical standards. However, that for steel products used in automotive manufacturing and in infrastructure and nonresidential construction improved.

Demand for metallurgical coal held steady in the United States last month, while that from offshore customers declined, particularly those in Europe. Falling prices for metallurgical coal have leveled off, according to the survey.

Iron ore production remained strong in northern Minnesota, but activity in recent months was down from levels seen earlier in 2012. A large mining company announced it will idle some of its production at operations in Minnesota and the Upper Peninsula in 2013, citing lower ore prices and reduced global demand.

A separate mining company increased its estimate of deposits at a potential copper, nickel and precious metals mine in northern Minnesota, sources told the Fed.

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