According to data released by American Iron and Steel Institute, AISI, for the period from June 21 to July 12, capacity utilization rates for steel mills in the US declined to 71.2% from 74.8%, while production was down 4.8% to 1.72 million tons from 1.80 million.
In the US, hot rolled coil and cold rolled coil are currently priced at USD 625 per short ton and USD 725 per short ton down by 3.1% and 2.7% from their early June peaks of USD 645 per short ton and USD 745 per short ton respectively. In China, spot prices of domestic hot rolled and cold rolled steel prices are down 17.2% and 17.3%, respectively from the peaks attained on April 15th.
As per JPMorgan steel prices in China may drop 10% for the remainder of 2010 due to high inventory levels and a demand slowdown.
Mr Scarlett Chen Citigroup analyst said "Big mills will have to cut more production than small mills. National daily production has shrunk 10% from the peak, but it is still 12% to 18% higher than in the first quarter of 2009, the last time losses were industry wide."
Crude steel production in China hit four month lows as companies cut back production on weakening demand from the construction sector and auto industry. Output was 53.8 million tonnes in June down 4.1% from 56.1 million tonnes in May.