Global steel output declined slightly between March and April, although production continued to make year-over-year gains, according to the latest data from the World Steel Association.

Worldwide production of crude steel totaled 127 million metric tons in April, down slightly from 129 million metric tons in March, the World Steel Association (worldsteel) reported last week. However, the combined steel output from the 64 countries tracked by worldsteel remained 5 percent above the April 2010 level. The capacity utilization rate increased to 82.8 percent, up 0.9 percentage points from March.

The latest production data indicate that month-to-month crude steel output has moderated, following a strong gain in March and healthy first-quarter performance. Despite the drop, production remains higher than it was a year ago, signaling that the steel industry recovery is continuing.

“Restocking boosted steel demand and prices and pushed steelmakers to produce more at the beginning of this year,” Reuters reports. “But as the restocking cycle came to an end and prices softened in the past few weeks, steelmakers started to cut production, aiming to find a balance with demand.”

Steel output from China, the world’s largest steel producer, dropped to 59 million metric tons, down from 59.4 million metric tons in March but 7.1 percent higher than the April 2010 total. However, doubts are emerging about the accuracy of China’s steel production figures, with some experts claiming output is being under-reported.

“The figures indicate that China has been focusing on producing steel and making sure buyers were available for it, rather than also tracking steel inventories. The data don’t include hundreds of smaller independently managed steel mills that don’t often report production or don’t report it fully for political and logistical reasons,” the Wall Street Journal explains. “There could be far more warehoused steel in China than other producers realize. If the Chinese economy softens, much of that steel could be exported, which could cause prices to fall around the world.”

Meanwhile, Japan produced 8.4 million metric tons of steel last month, down from 9.1 million metric tons in March and 6.3 percent below the level for April 2010, as the country’s production continues to suffer from the devastation caused by a recent series of disasters.

In total, Asian countries tracked by worldsteel produced 81.2 million metric tons of crude steel in April, down from 82.4 million metric tons in March but 5.8 percent above the April 2010 total. So far this year, Asian countries have produced 320.5 million metric tons of steel, 8.3 percent more than during the first four months of last year.

In the European Union, Germany’s crude steel output for April was 3.8 million metric tons, down from 4 million metric tons in March and 1.7 percent below the level for April 2010. Production in Italy totaled 2.5 million metric tons, down from 2.6 million metric tons in March but 9.8 percent above the prior-year level. Spain produced 1.5 million metric tons, down from 1.6 million metric tons in March and 5.8 percent less than in April 2010.

Combined, E.U. countries produced 15.8 million metric tons of crude steel last month, down from 16.2 million metric tons in March but 2.2 percent above the April 2010 total. In the first four months of 2011, the E.U. produced 61.4 million metric tons, 5.7 percent more than in the same period last year.

In the United States, steel output reached 7.1 million metric in April, relatively unchanged from the total for March but 2.1 percent higher than the April 2010 total. So far this year, the U.S. has produced 28.3 million metric tons of steel, up 6.8 percent from the same period last year.

According to the American Iron and Steel Institute, shipments from U.S. steel mills rose from 6.97 million net tons in February to 8 million net tons in March, a 14.9 percent monthly increase. Total shipments were 4.7 percent above the 7.65 million net tons shipped in March 2010. U.S. steel mills’ year-to-date shipments totaled 22.5 million net tons in March, a 9.6 percent increase over the same period last year.

Meanwhile, steel product shipments continue to improve. The Metals Service Center Institute last week reported that steel shipments from U.S. metals service centers totaled 3.34 million tons in April, 11.3 percent more than in April 2010. So far this year, shipments have reached 13.8 million tons, 20.3 percent above the same period last year. At 8.18 million tons, steel inventories in April were equivalent to a 2.4-month supply at current shipping rates.

The U.S. Geological Survey’s latest primary metals index reached 158.5 in April, a 0.3 percent increase from March’s revised reading, while the six-month smoothed growth rate (which tracks near-term metals trends) fell from 10.3 percent to 9.7 percent last month. These findings indicate the metals industry continued growing last month, albeit at a slower pace, and that “the recovery in the U.S. metals industry could continue.”

Short-term prospects for the global steel industry also seem strong. In a report earlier this month, the Organisation for Economic Cooperation and Development (OECD) forecast that global demand for steel would increase 6 percent in both 2011 and 2012. Growth over the next few years is expected to be considerably faster in emerging markets than in developed ones.

“Although recovery has been uneven, the world steel industry is recovering at a faster pace than many expected at the onset of the financial and economic crisis in late 2008. After a strong rebound in 2010, the recovery in global steel demand will slow this year, in line with slower growth in the world economy,” the OECD explains. “Demand recovery in many advanced economies in particular remains lacklustre. In contrast, demand in many emerging economies continues to increase steadily, supported by infrastructure investments, industrialisation and further urbanisation.”

Earlier: Global Steel Production Rises in March

Resources

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

Global Crude Steel Output Slows Down…
by Silvia Antonioli
Reuters, May 23, 2011

For Global Steel Industry, China Poses Guessing Game
by Robert Guy Matthews
The Wall Street Journal, May 24, 2011

March Steel Shipments up 14.9 Percent from February
American Iron and Steel Institute, May 16, 2011

Steel Shipment Growth Rate Slows in U.S., Canada
Metals Service Center Institute, May 17, 2011

Metal Industry Indicators
U.S. Geological Survey, May 20, 2011

Industry: OECD Steel Committee Says Global Outlook Promising but Risks Remain
Organisation for Economic Cooperation and Development, May 16, 2011