Planned US sheet mill maintenance to keep supply tight through year's end

US sheet producers' scheduled maintenance through the end of the year is likely to keep supply constrained. Headlining the projects is a partial reline scheduled at the biggest blast furnace in North America and two other longer outages due to construction for capacity expansions.

In total, there is expected to be 1.2 million-1.3 million mt of rated melt and rolling capacity out of the market between June and the end of the year, according to estimates.

The largest outage is the partial reline of Cleveland-Cliffs No. 7 blast furnace at Indiana Harbor East. A company spokeswoman confirmed the furnace would be down for 45 day starting on Sept. 1 for the planned maintenance. The furnace has a rated capacity of approximately 10,400 mt per day, according to industry estimates bringing the 45-day total to nearly 470,000 mt of production.

Rated capacity refers to the furnace or hot-strip mill's maximum production capability so given different utilization rates total production lost will likely be less.

In addition, Nucor Gallatin has a longer planned outage at its Kentucky mill related to construction for its capacity expansion. The outage has been reported to be scheduled to begin late November and last 25-30 days, according to market source. Currently, the hot-strip mill has a rated capacity of 4,110 mt/day, according to AIST data. The outage would bring total rated production of 103,000-123,000 mt out of the market.

North Star BlueScope's Delta, Ohio, mill is in a similar situation due to construction around its capacity expansion. It is facing an outage with an estimated duration of 10-14 starting in November. This would remove approximately 74,000-104,000 mt of rated capacity during the downtime.

Nucor, US Steel, Steel Dynamics, and ArcelorMittal/Nippon Steel all have additional scheduled maintenance through the end of the year. Some outages, like AM/NS Calvert's November downtime do not necessarily mean lost production with the mill as utilization on rolling capacity at the hot-strip mill can be increased before and after the downtime depending on slab availability.

Still, others at mini-mills with continuous casting capabilities means a loss of production while the maintenance is underway.

The pile up in outages through the end of the year comes as industry sources indicate automotive demand is likely to increase as OEMs look to catch up on lost production due to microchip shortages.

US sheet buyers have said there have been incremental improvements in supply and delivery performance by mills but supply remains tight. This all comes against the backdrop of seemingly unstoppable US hot-rolled coil prices that have risen nearly 290% since last August and continue to set all-time highs on a nearly daily basis.