Most major steel-producing countries dropped in their crude steel output in the first six months of 2009, with only a few exceptions. However, the pace of contraction slowed in June.

World steel output declined by 21.3 percent in the first half of 2009 compared with the first half of last year, the World Steel Association (worldsteel) reports. Total crude steel production in the 66 reporting countries for the first six months of 2009 was 549 million metric tons.

Most major steel-producing countries dropped in their crude steel output in the first six months of 2009, with only China and Iran increasing output during the same period, by 1.2 percent and 12.1 percent respectively.

North America’s steel production plunged by 48.5 percent in the first half of this year, to 35.8 million metric tons, while the European Union’s output dropped 43.2 percent to 62.2 million metric tons. Output from Asian steelmakers, which produce nearly two-thirds of world steel, fell by 7.8 percent to 360 million metric tons.

However, the main industry group said the pace of contraction slowed in June, with steel production falling at a slower pace last month when compared with May’s 21 percent drop in global output.

For the month of June, global steel output dropped 16 percent lower than the same period last year. World crude steel production last month was 99.8 million metric tons across the 66 countries reporting to worldsteel.

China’s crude steel production rose 6 percent higher in June, and Iran produced 9.4 percent more than the same month last year.

Japan produced 33.6 percent less crude steel last month than in June 2008, and South Korea recorded a 14.4 percent decline from the same time last year. Brazil produced 33.9 percent less crude steel than it did in June 2008. Russia’s crude steel production for June 2009 was 22.1 percent less than in the same month last year, and Turkey’s output dropped 12.7 percent.

In the EU, Germany’s crude steel production decreased 41.1 percent year over year, and Italy produced 43.1 percent less last month than it did in June 2008. Spain’s crude steel output was 31.4 percent less than the same month last year, and France showed a 37.9 decrease from June of last year.

Last month, the United States produced 4.4 million metric tons of crude steel, a 46.9 percent decrease compared to the same month last year.

Shipments of both steel and aluminum from U.S. metals service centers in June also declined at a slower rate than in previous months, the latest Metals Activity Report from the Metals Service Center Institute shows. U.S. inventories of both metals fell in June.

The American Iron and Steel Institute’s latest year-to-year comparison of year-to-date shipments (May) from U.S. steel mills shows a number of changes within major market classifications: service centers and distributors, down 55.9 percent; automotive, down 56.2 percent; construction and contractors’ products, down 53.3 percent; and oil and gas, down 60.7 percent.

Global steel output fell last year after climbing for six years on higher demand for the metal that supports buildings and goes into making machinery and automobiles. In 2008, the world steel industry produced more than 1.33 million metric tons of steel, down from 1.35 million in 2007, according to worldsteel’s 2009 edition of World Steel in Figures, released in late June. The top five steel-producing countries in 2008 were China (500.5 million metric tons), Japan (118.7 million), U.S. (91.4 million), Russia (68.5 million) and India (55.2 million).

“The market has been turbulent over the last three decades but today the industry is more efficient and better prepared thanks to global restructuring and consolidation,” according to industry group’s latest annual report. “The long-term prospect for the global steel market is strong. The speed of growth might have slowed down but the industry will continue to grow in different ways.”

Consolidation in China, capacity expansion in emerging markets and, in developed countries, steelmakers’ continued shift from volume to value are expected to make the global steel industry more competitive and more efficient as the world economy recovers.

Resources

June 2009 Crude Steel Production
worldsteel, July 20, 2009

World Steel in Figures 2009
worldsteel, June 29, 2009

Metals Activity Report: Steel, Aluminum Shipments from Metals Centers Continue to Decline in the U.S. and Canada
Metals Service Center Institute, July 17, 2009

May Steel Shipments Down 52.5 Percent from Last Year
American Iron and Steel Institute, July 16, 2009