Production
World crude steel production in July dropped 1.6 percent from June, yet it remained 6.2 percent ahead of the same month last year, according to the International Iron and Steel Institute (IISI).

Total world crude steel production was 815.1 million metric tons in the first seven months of 2008, a 6.1 percent increase over the same period in 2007.

July 2008 production of 117.2 million metric tons was down from 118.8 million in June as China's production dropped by 4.4 percent, reflecting the industrial slowdown as the country prepared to host the Summer Olympics in August.

In July 2008, China's million metric tons growth rate slowed to 9.6 percent, compared to its growth rate peak of 26.3 percent in January 2006. Nonetheless, China's crude steel production for July 2008 was 7.5 percent higher than in July 2007. In the first seven months of 2008, China produced 308.3 million metric tons of crude steel, an increase of 9.3 percent compared to the same period in 2007.

Overall, Asia produced 66.4 million metric tons of crude steel in July 2008 compared to 62 million metric tons in July 2007, a 7.1 percent increase in crude steel production.

Other key findings from the IISI:

• The largest producer in the European Union this July was Germany, with 3.8 million metric tons of crude steel.

• The United Kingdom produced 1.1 million metric tons of crude steel, a decrease of -3.9 percent compared to the same month last year.

• South America recorded a 12.8 percent increase in crude steel production with 4.5 million metric tons in July 2008.

• Brazil produced 3.2 million metric tons, 11.5 percent higher than in July 2007.

Meanwhile, North America showed its eighth consecutive monthly increase of moving annual total growth rate, rising to 5.4 percent from 4.5 percent last month. Total crude steel production in North America was 11.6 million metric tons in July 2008, an increase of 7.1 percent in July 2007.

World steel production by the 66 nations reporting to the IISI is on pace to reach 1.39 billion metric tons in 2008, which, according to Purchasing.com, "would be ahead of the earlier IISI prediction of 6.7 percent annual growth to 1.28 billion metric tons."

Prices
"Carbon steel prices are exploding by 46 percent this year after rising just 2 percent last year while stainless steel prices have dropped 14 percent off the record highs of 2007 — when prices increased by 42 percent," Purchasing.com noted earlier this month.

Overall, steel prices are expected to average $933/ton for hot-rolled sheet this year, up from $527 in 2007, and then $948 next year, Purchasing reported. Cold-rolled sheet is projected at $1,019 this year, up form $614 in 2007, and then rise to $1,051 in 2009. Hot-dipped galvanized is projected to average $1,066 this year, up from $656 in 2007 and then average $1,061 next year.

Shipments
In terms of shipments, steel products from United States and Canadian metals service centers continued to decline on a year-over-year basis in July, according to the Metals Service Center Institute (MSCI). Yet the rate of decline slowed both in the U.S. and Canada versus earlier months' reporting.

Steel product shipments from U.S. metals service centers for the first seven months of this year totaled 30.35 million tons, a 3.6 percent decline from the same period last year. Canadian metals service centers' shipments for the first seven months of 2008 totaled 2.16 million tons, down 2.6 percent.

The MSCI's Metals Activity Report provides the following highlights:

• In July, steel product shipments from U.S. metals service centers totaled 4.07 million tons, a 2.1 percent decline from July 2007.

• U.S. inventories of steel products, at 13.12 million tons at the end of July, were down 2.2 percent from July 2007 and, at current shipping rates, represent a 3.2-month supply.

• Canadian metals service centers shipped 265,400 tons of steel products during July, down 1.8 percent from a year ago.

• Canadian inventories at the end of July were at 1.08 million tons, down 10.1 percent from the end of July 2007 and, at current shipping rates, represent a 4.1-month supply of steel on hand.

Finally, in its August 2008 report on business conditions, the Precision Metalforming Association (PMA) determined that North American metalworking companies are anticipating weak business to continue over the next three months.

When asked what the trend in general economic activity will be during the next three months, metalformers expect only a slight improvement. Twenty percent of the 147 metalforming companies in the U.S. and Canada report that activity will improve (up from 17 percent in July), 52 percent predict activity will remain unchanged (compared to 48 percent last month) and 28 percent forecast a decline in business conditions (down from 35 percent in July).

Current average daily shipping levels remained virtually unchanged in August.

Resources

June 2008 Crude Steel Production
International Iron and Steel Institute, July 18, 2008

China Industrial Output Growth at 17-Month Low
Agence France-Presse, Aug. 13, 2008

World Steel Output Up 6% Through July
by Tom Stundza
Purchasing, Aug. 20, 2008

2009 Price Outlook: Prices Will Stay High for Metals
by Tom Stundza
Purchasing, Aug. 14, 2008

July 2008 Metals Activity Report
Metals Service Center Institute, Aug. 18, 2008

Business Conditions Report: August 2008
Precision Metalforming Association, Aug. 14, 2008