Worldwide crude steel output declined on a month-over-month basis in June, yet overall production for the first half of 2012 remained above the prior-year level, and demand is forecast to rise through the remainder of the year.

Global crude steel production dropped slightly from 131 million tons in May to 128 million tons in June, according to the World Steel Association (worldsteel). Total steel production for the 64 countries tracked by worldsteel also inched down 0.1 percent on a year-over-year basis last month. However, overall steel output for the first six months of 2012 reached 766.9 million tons, a 0.9 percent increase over the same period in 2011.

The latest figures indicate that although global steel output is declining on a monthly basis, the long-term production is trending upward.

Steel output from China, the world’s largest steel producer, dropped to 60.2 million tons in June, down from 61.2 million tons in May but 0.6 percent above the total for June 2011. So far this year, Chinese steel output has totaled 357.2 million tons, 1.8 percent above the level for the same period last year.

Elsewhere in Asia, Japanese production stood at 9.2 million tons in June, unchanged from May but 3.5 percent above the prior-year level. South Korea’s steel output dropped to 5.9 million tons in June, down slightly from 6 million tons in May but 4.3 percent above the total for June 2011. So far this year, Asian countries have produced 494.8 million tons of crude steel, 1.6 percent more than in the first six months of 2011.

Meanwhile, major steel producers in the European Union posted declines across the board. Germany’s crude steel output totaled 3.7 million tons in June, down from 3.9 million tons in May and 4 percent below the level for June 2011. Production in Italy dropped to 2.4 million tons, down from 2.6 million tons in May and a 7.9 percent decrease from the prior year. In Spain, steel output totaled 1.3 million tons in June, unchanged from May but 8.8 percent below the June 2011 total.

Countries in the E.U. produced a combined total of 88.9 million tons of crude steel in the first half of 2012, a 4.6 percent decline from the comparable period last year.

In the United States, monthly steel output fell to 7.3 million tons in June, down from 7.7 million tons in May though still 0.8 percent higher than in June 2011. So far this year, U.S. steelmakers have produced 46.3 million tons of crude steel, an 8.4 percent gain over the first six months of 2011.

Despite the recent month-to-month slowdowns in several key steel-producing regions, the forecast for the global steel sector remains strong. Apparent steel usage is expected to increase 3.6 percent through the rest of the year, reaching a total of approximately 1.4 billion tons worldwide, according to worldsteel’s latest Short Range Outlook. Moreover, steel demand is projected to grow an additional 4.5 percent in 2013.

“Signs of stability are now emerging and we expect the recovery to resume in the second half of this year, leading to a higher growth forecast for 2013,” Hans Juergen Kerkhoff, chairman of the worldsteel economics committee, said. “Although the global impact of the eurozone debt crisis has been limited so far, uncertainties continue to exist and this remains the key downside risk to our current outlook. High oil prices and geopolitical tensions in the oil producing regions are also important downside risk factors.”

Apparent steel use in the U.S. is forecast to grow by a robust 5.7 percent in 2012. In 2013, U.S. steel usage is projected to grow by 5.6 percent to 99.5 million tons, bringing it to 92 percent of the 2007 level.

The performance of U.S. steel products is similar to that of steel output, with steel product shipments from metals service centers falling to 3.5 million tons in June, a 1.9 percent decrease from the total for June 2011, according to Metals Service Center Institute. However, year-to-date shipments totaled 22 million tons, a 5.9 percent increase over the total for the first six months of 2011.

Meanwhile, steel product inventories reached 9 million tons at the end of June, 0.7 percent lower than in May but an increase of 13.6 percent over June 2011. At current shipping rates, steel product inventories nationwide represent a 2.6-month supply, 15.9 percent more than in June of last year.