In April, global crude steel production rose by 2 million metric tons over March and increased more than 30 percent over the prior-year level, according to the World Steel Association. However, concerns are also rising over increased pricing pressure from iron ore manufacturers.

Global production of crude steel increased 35.7 percent year-over-year in April, while capacity utilization rates among steel manufacturers climbed to 83.4 percent last month, according to the World Steel Association (worldsteel) today. Total steel production for the 66 countries tracked by worldsteel increased to 122 million metric tons in April, up from 120 million metric tons in March and significantly higher than the roughly 90 million tons produced in April 2009.

Following a 30.6 percent year-over-year increase in March, steel output continues to make steady gains, with production rates in April climbing in every major steel-producing region that reports to worldsteel.

Steel output from China, the world’s largest steel producer, rose to 55.4 million metric tons, a 27 percent increase over the same period last year and the highest amount of steel the country has ever produced in a single month. Japan’s production grew 56.7 percent year-over-year, reaching 9 million tons, while South Korea’s production rose to 4.8 million tons, a 22.9 percent increase over last year. In total, Asian countries have produced more than 300 million metric tons of steel so far this year, 29.3 percent more than in the same period in 2009.

In the Eurozone, Germany’s crude steel output surged 107.2 percent year-over-year, climbing to 3.9 million tons in April. Meanwhile, production in Italy rose 57.9 percent to reach 2.4 million tons, and Spain’s production rose 36 percent to reach 1.6 million tons. Countries in the European Union have produced a total of 58 million metric tons of steel year-to-date, 44.3 percent more than in the first four months of last year.

In the United States, April crude steel production rose 79.4 percent year-over-year, reaching 6.8 million metric tons. This was slightly lower than the 6.9 million tons reported for March.

Shipments from U.S. steel mills have also risen in recent months, reflecting steady growth in demand for steel and steel products. According to the American Iron and Steel Institute (AISI) on Monday, the nation’s steel mills shipped 7.6 million net tons in March, 21.2 percent more than the 6.3 million tons shipped in February and 82 percent above the prior-year level.

According to a report from the Metals Service Center Institute on Tuesday, steel product shipments from U.S. metals service centers grew to 3 million tons in April, a 22.3 percent increase over the same month last year. Year-to-date service center shipments total approximately 11.5 million tons, 13.9 percent more than in the same period in 2009. Steel inventories continued to decline in April, dropping to 6.7 million tons at the end of the month, 5.6 percent below the prior-year level and reflecting a 2.2-month supply.

Rising demand for steel materials and products is credited for the downward trend in inventories, as manufacturers continue to lower stockpiles in the face of increasing sales. However, higher demand is also making pricing pressure a greater concern.

“Steel prices could rise even higher after soaring almost 50 percent this year, as raw material costs continue to climb and global demand shows little sign of abating,” Reuters reports. “Steelmakers have steadily been raising prices, partly to benefit from a strong market after years of decline in the industry, and also to pass on spiraling costs of iron ore and scrap metal, two major raw materials for steel.”

Recent changes to the pricing model for iron ore, a key raw material in steel production, are likely to drive costs higher for steel purchasers down the line, particularly as steel consumption in international markets inflates demand.

“China and other emerging markets are seen driving demand in the long term as these countries continue to invest in industrialization and urbanization,” the Wall Street Journal explains. “China consumed about 68 percent of the 1 billion tons of iron ore traded overseas in 2009.”

Earlier

Global Steel Production Rises in March

Steelmakers Troubled Over Iron Ore Pricing

Resources

April 2010 Crude Steel Production
World Steel Association, May 20, 2010

March Steel Shipments up 21.1 Percent from February
American Iron and Steel Institute, May 17, 2010

April Service Center Metal Shipments Maintain Momentum
Metals Service Center Institute, May 18, 2010

Steel Prices: How Much Higher Can They Go?
by Steve James
Reuters, May 18, 2010

BHP Billiton CEO: Iron-Ore Price Has Support at $120-$130/Ton
by Anna Raff
The Wall Street Journal, May 16, 2010