US steel capacity utilization crossed the 78% threshold for the first time since Q1 2024, reflecting the tightening domestic supply-demand balance. The American Iron and Steel Institute (AISI) reported that raw steel production for the week ending June 20 reached 1.82 million net tons, with capacity utilization at 78.2%, up from 77.1% the prior week.
The supply response to higher prices has been swift. Nucor Corporation announced on June 24 that it will restart its Electric Arc Furnace (EAF) at the Berkeley County facility in South Carolina, which has an annual capacity of 1.2 million tons. The mill will supply hot rolled, cold rolled, and galvanized products. Nucor expects first steel from the restart in August 2026.
US Steel Corporation is following suit. The company confirmed plans to restart the Granite City Works blast furnace in Illinois, targeting Q3 2026. Granite City has a capacity of approximately 1.5 million tons per year, primarily producing hot rolled coil. US Steel management noted that the restart decision was based on improving market conditions and customer demand.
These restarts add approximately 250,000 tons per month to the domestic market from August onward. Combined with existing operating capacity, this should be sufficient to moderate the current pricing pressure — but the timing has a 6-8 week lag. In the near term, the market remains tight, with lead times for new HRC orders extending to 5-7 weeks from 3-4 weeks in April.
The supply addition is meaningful in the context of the import reduction. The Mexico import restriction removes roughly 300,000 tons per month from the import channel, while the mill restarts add 250,000 tons per month. The net effect is a small but persistent supply deficit that will keep prices elevated through Q3 2026.
The cost structure for domestic EAF mills is favorable. Scrap steel prices remain contained at $380-400/ton, and electricity costs have moderated with lower natural gas prices. The spread between HRC selling prices and EAF production costs has widened to approximately $350/ton, well above the $200-250 range that EAF mills target for healthy margins. This margin environment incentivizes further capacity restarts if utilization remains above 78%.
The mill restarts are positive for the medium-term price outlook — new supply arrives in 6-8 weeks. For Q3 procurement: the market will remain tight through August. For Q4 and beyond: the supply additions and import restriction impact should roughly offset, with prices settling in the $1,050-$1,150 range. Lock in Q4 volumes now if you can get $1,100/ton or below.