Prices for steel soared to historic highs last year. Now, as the global economy still struggles desperately to find footing, output of the metal continues to mirror the disheartening economic downturn.

Global steel output in March dropped to 23.5 percent lower than in the same period last year, only marginally better than January when production was 24 percent below January 2008, across 66 nations of the World Steel Association.

“Steel demand has plunged since late last year, when the global economic crisis undermined key customers in the auto, construction and machinery industries,” the Associated Press notes.

Last month the United States produced 4.1 million metric tons of crude steel, a 52.7 percent decrease from the same month last year.

Overall, the first quarter of 2009 was a grim one for the U.S. steel industry. The Metals Activity Report from the Metals Service Center Institute’s (MSCI) shows 7.6 million tons of steel shipments amounting to a 41.8 percent decline from 2008′s first quarter. At the close of Q1 2009, steel inventories were at 7.84 million tons, approximately a three-month supply and 22.3 percent lower than the previous year.

U.S. metals service center steel shipments in March were down 39.2 percent, with total steel shipments amounting to 2.59 million tons. Despite the significant shipment declines, the U.S.’s decline in March was still higher than the previous month — shipments in February were 43.3 percent lower than the same time last year, the MSCI reports.

The American Iron and Steel Institute’s latest year-to-year comparison of year-to-date shipments (February) shows a number of changes within major market classifications: service centers and distributors down 54.9 percent; automotive down 57.7 percent; construction and contractors’ products down 58 percent; and oil and gas down 39.7 percent.

AK Steel this week said it has seen more imported steel in the U.S., especially electrical steel. “The prices in the U.S. are a little higher than in other markets, making the U.S. an attractive place to sell excess steel,” the Wall Street Journal reports (subscription required).

Shipments of steel (and aluminum) products from metals service centers in Canada continued their decline in March, but the rate of decline was not as great as during the first two months of 2009. On a year-over-year basis, Canadian steel shipments in March were down 25.5 percent from March 2008 shipments, a significant improvement from the country’s 42.1 percent decline in February. Canadian metals centers shipped 445,600 tons of steel last month.

At the end of March, Canadian steel inventories were around 1.17 million tons, a 30.5 percent decrease from the same period in 2008, the MSCI reports. The total volume of steel for Canada’s first quarter was 35.6 percent lower than the volume in Q1 2008.

With much of North America showing continually low steel output, it should come as little surprise that Asian markets and the European Union also continue to exhibit similar symptoms.

According to the World Steel Association, the first quarter of 2009 was also a rough one for Asia, which produced 8.9 percent less crude steel than in Q1 2008. The EU was down 43.8 percent for the same period, and the U.S. and Canada combined showed a 52.1 percent drop in their first-quarter crude steel production.

Asian crude steel’s 8.9 percent drop can be felt in countries such as Japan, which experienced a 46.7 percent drop in year-over-year crude steel production in March. South Korea also dropped significantly in year-over-year crude steel production in March 2009, decreasing 21.2 percent from March 2008 to produce 3.7 million metric tons of crude steel last month.

China fared significantly better, showing not only a 0.3 percent decrease over the same period, but also a 1.4 percent uptick in first-quarter production from Q1 2008.

Countries in the EU felt the slump as well, with France’s crude steel production down 36.7 percent this March from the same period in 2008. Italy and Germany’s monthly steel crude production for March were down 42.7 percent and 49.8 percent respectively, when compared to March 2008. Spain dropped 41.2 percent in crude steel production from March the previous year.

Companies worldwide are responding to the drastic drops in steel production. “The world’s biggest steel producer, ArcelorMittal, has slashed production and cut jobs in response to the crisis in the sector,” Agence France-Presse reports. “The group had net losses of $2.6 billion in the last quarter of 2008″

But not all steel firms are feeling the downturn as drastically as their country as a whole. According to Reuters, Egypt’s largest steel producer, Ezz Steel, experienced a 9 percent increase in profit from 2008. Net sales are up 35 percent.

JSW Steel in India is also showing positive signs of growth, the Economic Times says. Projected growth in sales for 2009 is estimated at a 60 percent increase, which would enable the company to expand its capacity. With 2009 market growth only estimated to expand 8 percent in India, JSW will be well ahead of the curve.

Globally, steel output is expected to show signs of recovery in 2010, with an estimated 5 percent increase in global steel output, UK consultancy MEPS (International) LTD reports. “Further growth in steelmaking is forecast for the following three years as the global economy improves. A new record steel production figure is anticipated in 2012 — five years after the previous highpoint.”

Earlier

Steel Shipments and Output Continue to Slide

Steel Production Slowdowns Idle U.S. Plants

Abrupt Slowdown in Steel Industry

In Face of Weaker Demand, Steelmakers Consider Production Cuts

The Steel Situation: Production, Prices and Shipments

Resources

March 2009 Crude Steel Production
World Steel Association, April 21, 2009

AK Steel Posts $73M Loss in 1Q
The Associated Press, April 21, 2009

Metals Activity Report: Metals Shipment Declines Ease Slightly in U.S., Canada
Metals Service Center Institute, April 17, 2009

February Steel Shipments Down 52.4 Percent From Last Year
American Iron and Steel Institute, April 22, 2009

AK Steel Swings to a Loss
by Robert Guy Matthews and Mike Barris
The Wall Street Journal, April 22, 2009

World Steel Output Down 23.5% in March
Agence France-Presse, April 21, 2009

Egypt’s Ezz Steel 2008 Profit Rises 9 Percent
Reuters, April 22, 2009

JSW Steel Expects 60% Increase in Sales in 2009-10
by Durba Ghosh
Economic Times, April 22, 2009

Steel Industry Down But Not Out – Recovery Forecast for 2010 – New Record Consumption in 2012
MEPS (International) Ltd, April 22, 2009