Domestic raw steel production for the last week of July was 1,876,000 net tons. This was up 37% compared to the same week last year when production was just 1,350,000 net tons. Sequential volumes were up by less than 1%, or the equivalent of an additional 320 truckloads, compared to the week prior (20,720 total truckloads).
According to the American Iron and Steel Institute (AISI), the capacity utilization rate was 85% as of the end of July. This is a substantial improvement over the same week last year when utilization was at 60.3%.
Production from the start of the year through July 31, 2021 was 54,555,000 net tons, which is up 19% compared to the first seven months of 2020. That’s the equivalent of an additional 350,000 truckloads of steel this year.
Note: All rates exclude fuel unless otherwise noted.
For flatbed carriers, this has also resulted in a sharp increase in spot rates, especially in the metal and machinery freight category where spot rates have increased by 35% or $0.84/mile this year. The current average for this freight class is $3.10/mile.
Flatbed load volumes on the two busiest lanes last week between Houston and Ft. Worth created an imbalance last week. Northbound loads volumes were down by 2% from Houston to Ft. Worth while volumes in the opposite direction were up 11%.
Spot rates were down in both directions though — $0.03/mile to $3.17/mile northbound and $0.02/mile to $1.92/mile southbound.
Loads east to New Orleans out of Houston were flat last week while capacity eased with spot rates dropping $0.03/mile to an average of $2.76/mile on the 350-mile run.
Houston to El Paso recorded the third highest load volume last week with volumes up 11% last week and rates up $0.01/mile to an average of $3.31/mile.
Flatbed spot rates continued their sideways shuffle, decreasing for the fifth week in a row last week by another $0.01/mile to an average of $2.66/mile. Flatbed spot rates remain $0.60/mile higher than the same week last year and $0.19/mile higher than the same time in 2018.
How to interpret the rate forecast:
- Ratecast: DAT’s core forecasting model
- Short Term Scenario: Formerly the pessimistic model that focuses on a more near-term historical dataset
- Blended Scenario: More heavily weighted towards the longer-term models
- Blended Scenario v2: More heavily weighted towards the shorter-term models