As the saying goes, everything is bigger in Texas—and lately that includes steel tonnage. Per the American Iron and Steel Institute (AISI), 710,000 pounds of steel were produced in the South (which includes Texas) during the week ending January 30.

During that same period, the Great Lakes region produced 608,000, followed by the Midwest, Northeast, and West, each of which produced less than 200,000 tons. Collectively, however, the number of tons produced during the week marked a rise of roughly 0.5%, or 8,000 tons, compared to the week prior. It represents a capacity utilization rate of 76.1%. It’s another encouraging sign that capacity is coming back into a market desperately in need of material.

Good Utilization?

When it comes to capacity utilization, those in the range of 80-85% are considered good. Consider it a sweet spot that is close enough to full capacity, but with room to increase should demand levels ramp up.

Then COVID-19 hit. Credit mills with foreseeing a drop in demand and promptly taking utilization rates down to around 50% in the spring. However, demand came back online faster than anticipated, forcing mills into catch-up mode, and sending prices higher.

Summer Lovin’

Meanwhile back in Texas, Steel Dynamics, one of the biggest producers in Texas, takes that national optimism for capacity utilization up a notch. The company reported that its steel mills operated at 84% capacity during Q4 2020. For the year, its flat-rolled steel mills achieved 97% utilization.