Worldwide Steel Output Remains Strong
October 27, 2011
Worldwide crude steel output declined on a month-over-month basis in September, yet production remained above the prior-year level and demand is forecast to grow through 2012, data indicate.
The latest figures indicate that while global steel output is declining on a monthly basis, production remains stronger than it was during this time last year.
Steel output from China, the world's largest steel producer, dropped to 56.7 million metric tons in September, down from 58.8 million the prior month but 16.5 percent above the total for September 2010. Elsewhere in Asia, Japanese production reached 8.9 million metric tons, unchanged from August and a 3.8 percent decrease from the prior-year level. South Korea's month-over-month steel output was also unchanged, standing at 5.5 million metric tons in September and August, but it rose 17.7 percent above the total for September 2010.
So far this year, Asian countries have produced 728.3 million metric tons of crude steel, 9.5 percent more than in the first nine months of 2010.
Meanwhile, major steel producers in the European Union posted both month-over-month and year-over-year gains in September. Germany's crude steel production totaled 3.7 million metric tons in September, up from 3.6 million in August and 10.3 percent more than in September 2010. Italy produced 2.6 million metric tons, up from 1.4 million in August and 11.5 percent above the prior-year level. In France, steel output climbed to 1.3 million metric tons last month, up from 1 million in August and 4.2 percent above September 2010.
Countries in the E.U. produced a combined total of 135.7 million metric tons of crude steel in the first three quarters of the year, a 4.3 percent increase over the comparable period in 2010.
In the United States, month-over-month crude steel output decreased to 7.2 million metric tons in September, down from 7.5 million in August though still 8.9 percent higher than the nation's output in September 2010. So far this year, U.S. steelmakers have produced 64.7 million metric tons of crude steel, 6.2 percent more than in the same period last year.
Despite month-to-month slowdowns in several key steel-producing regions in September, the forecast for the global steel sector remains strong. Apparent steel usage is expected to increase 6.5 percent through in 2011, reaching a total of approximately 1.4 billion metric tons worldwide, according to worldsteel's recently released Short Range Outlook. Further, this month's report forecasts steel demand to climb 5.4 percent in 2012. In the U.S. alone, steel demand is expected to rise 11.6 percent this year and 5.2 percent in 2012.
"In the first half of 2011, we witnessed sustained momentum in the recovery of steel demand globally carrying over from 2010," Daniel Novegil, chairman of the worldsteel Economics Committee, said in a statement. "This is despite a series of anticipated and unanticipated negative developments: the ongoing euro area sovereign debt crisis, the earthquakes in Japan, the political/social unrest in some countries of the MENA region [the Middle East and North Africa] leading to the related surge in oil prices and the tightening of government monetary measures in many emerging economies."
U.S. steel shipments are already on an upswing. The American Iron and Steel Institute reported last week that American steel mills shipped 8.3 million net tons in August, a 12.1 percent increase from July. The August increase also marked a 15 percent gain over shipments in August 2010. At 60.5 million net tons, the year-to-date total of shipments marks an 8 percent increase over the same period last year.
U.S. steel products are also performing well, with steel product shipments from metals service centers reaching 3.4 million tons last month, up 7.4 percent from September 2010, according to the Metals Service Center Institute last week. In the first nine months of 2011, steel shipments totaled 31 million tons, a 15.9 percent increase over the same period in 2010. Meanwhile, steel product inventories rose to 8.5 million tons at the end of September, a 12.9 percent increase over September 2010, and the equivalent of a 2.5-month supply at current shipping rates.
"Today the global economy is facing increased uncertainty over how the ongoing turmoil in the financial markets will evolve and how it will affect the real economy," Novegil said. "Our current forecast for 2012 assumes that developing economies continue to drive global growth and the policy response to the European sovereign debt crisis prevents increased volatility in the equity and financial markets. In light of this global economic uncertainty, our forecast should be considered as 'cautiously optimistic.'"
September 2011 Crude Steel Production World Steel Association, Oct. 21, 2011
August 2011 Crude Steel Production World Steel Association, Sept. 20, 2011
worldsteel Short Range Outlook World Steel Association, Oct. 10, 2011
August Steel Shipments up 12.1 Percent from July, up 8.0 Percent Year to Date American Iron and Steel Institute, Oct. 19, 2011
Year over Year Growth in Service Center Shipments Continues
Metals Service Center Institute, Oct. 18, 2011