Worldwide steel output increased in March, both on a monthly basis and year-over-year, reflecting strong production gains in the first quarter of 2011.

Global crude steel production totaled 129 million metric tons in March, up from 117 million metric tons in February, the World Steel Association (worldsteel) reported last week. Steel output of the 64 countries tracked by worldsteel also climbed 7 percent above the March 2010 level, while the first-quarter total of 372 million metric tons was 8.8 percent higher than in Q1 2010.

The latest production data indicate that month-to-month steel production has resumed growing, following a modest decline in February. With total output rising above the prior-year level both for March and the first quarter as a whole, the steel industry recovery appears to be strengthening.

“Steel companies across the board benefited from the run-up in steel prices over the past quarter, which have been largely driven by increased demand from emerging markets and rising inflationary pressures,” MarketWatch reports. “Demand from key end markets [is] also fueling profits for steel companies. A number of the companies’ flat-rolled products primarily go into the automotive and aerospace industries, which have seen an uptick in industry demand over the past quarter.”

Steel output from China, the world’s largest steel producer, climbed to 59.4 million metric tons in March, up from 54.3 million metric tons in February and 9 percent above the March 2010 total.

Meanwhile, Japan produced 9.1 million metric tons of steel in March, up from 8.9 million metric tons in February. However, production was down 2.7 percent from the same month last year, the first time in 17 months that steel output has declined year-over-year.

“The magnitude-9 earthquake and tsunami that struck northeastern Japan on March 11 damaged plants operated by mills such as Sumitomo Metal Industries Ltd. in affected areas. Steelmakers are also delaying shipments to customers including carmakers that slashed output due to parts shortage stemming from the quake,” Bloomberg News explains.

In total, Asian countries tracked by worldsteel produced 82.4 million metric tons of crude steel in March, an 8 percent increase over March 2010. In the first quarter of 2011, Asia produced 237.3 million metric tons of steel, 9.1 percent more than in the first quarter of last year.

In the European Union, Germany’s crude steel output for March totaled 4 million metric tons, up from 3.7 million in February and 0.1 percent higher than in March 2010. Production in Italy rose to 2.6 million metric tons, up from 2.3 million in February and 8.6 percent higher than March 2010. Spain produced 1.6 million metric tons, up from 1.4 million in February and 0.3 percent higher than in March 2010.

Combined, E.U. countries produced 16.2 million metric tons of crude steel last month, 4 percent more than in March 2010. For the first quarter, E.U. steel output totaled 45.6 million metric tons, 6.9 percent more than in Q1 2010.

The United States’ steel production rose to 7.1 million metric tons in March, up from 6.6 million the previous month but 0.2 percent below the total in March 2010. U.S. steel output grew for the first quarter as whole, however, totaling 21 million metric tons, 7.1 percent more than in Q1 2010.

According to the American Iron and Steel Institute, shipments from U.S. steel mills fell from 7.5 million net tons in January to approximately 7 million net tons in February, a 7.5 percent decrease but still 10.4 percent above the February 2010 total. Year-to-date steel mill shipments totaled 14.5 million net tons, 12.5 percent more than for the first two months of 2010.

Meanwhile, steel product shipments have been on the rise. The Metals Service Center Institute last week reported that steel shipments from U.S. metals service centers rose to 3.82 million tons in March from 3.2 million tons in February. Shipments totaled 10.43 million tons in the first quarter of 2011, 23.5 percent more than in the same period last year. Steel product inventories were nearly 8.02 million tons at the end of March, equivalent to a 2.1-month supply at current shipping rates.

The U.S. Geological Survey’s latest primary metals index was 156.7 in March, relatively unchanged from February’s revised reading, while the six-month smoothed growth rate (which tracks near-term trends) decreased to 8.7 percent from 10.1 percent in February. These findings indicate that the U.S. metals industry continued to grow last month, albeit at a slower pace. However, “it is not clear what effect the geopolitical turmoil in North Africa and the Middle East and the earthquake and tsunami in Japan will have on metals demand.”

Despite these uncertainties, prospects for the steel industry remain promising. In its latest short-range outlook report, worldsteel forecasts global steel use to increase 5.9 percent this year and another 6 percent in 2012. In the U.S. alone, steel use is expected to grow 13 percent to 90.5 million metric tons in 2011, “reflecting the second round of quantitative easing and new fiscal policy initiatives that gave a boost to economic activities and sentiments in industrial and energy markets.”

Earlier

Worldwide Steel Production Sees Monthly Decline

Resources

March 2011 Crude Steel Production
World Steel Association (worldsteel), April 20, 2011

High Steel Profits Pump up Profits, Shares
by Ashley Lau
MarketWatch, April 26, 2011

Japan Steel Output Falls First Time in 17 Months After Quake
by Masumi Suga
Bloomberg News, April 20, 2011

February Steel Shipments Down 7.5 Percent from January
American Iron and Steel Institute, April 18, 2011

U.S., Canadian Metals Shipments Steady in March
Metals Service Center Institute, April 19, 2011

Metal Industry Indicators
U.S. Geological Survey, April 15, 2011

worldsteel Short Range Outlook
World Steel Association (worldsteel), April 18, 2011