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Global Steel Output Rose in May Despite Declining Capacity Utilization


Post Date: 29 Jun 2013    Viewed: 381

Overall gains were mixed throughout the 63 countries that report figures to the World Steel Association. This is a change from recent months. Until now, most production reports were down and global gains had been confined largely to Asia, in particular China.


In the EU, Germany produced 3.7 Mt of crude steel last month, unchanged from April and down 1.5 percent from May 2012. Italy’s crude steel production increased 9.5 percent over the previous month to 2.3 Mt, though this figure is down 11.1 percent compared to last year. French crude steel production reached 1.4 Mt, a 16.7 percent rise over April’s output of 1.2 Mt, though 3.5 percent less than May 2012. Spain produced 1.4 Mt of crude steel in May 2013. This figure is identical to the previous month, and is a 4.3 percent increase over the same time last year.


In Russia, crude steel output gained 8.9 percent over April to 6.1 Mt last month. This is a slight increase of 0.2 percent from May 2012.


Chinese output continued to outpace all others, producing just under half of all crude steel for the month. The nation’s production of 67.0 Mt was 1.2 percent greater than in April, and represents a 7.3 percent gain over the previous year. Japan’s crude production rose 4.3 percent over April to 9.6 Mt. That figure is 4.3 percent greater than May 2012. In South Korea, crude production remained largely unchanged at 5.5 Mt, though this is 7.1 percent below the previous year’s figure. U.S. production rose by 2.7 percent to 7.5 Mt, up from 7.3 Mt in April. Output was down 4.6 percent compared to May 2012.


A more recent tonnage report from the American Iron and Steel Institute (AISI) announced that, for the week ending June 22, U.S. crude steel production rose 1 percent to 1,881,000 net tons from 1,862,000 net tons the previous week. This figure is 0.6 percent greater than the same period last year.


AISI tracks domestic tonnage week to week. Its figures are estimates compiled from 50 percent of U.S. producers combined with monthly production data.


Despite the global rise in tonnage, total capacity utilization was down. World Steel Association’s global crude steel capacity utilization ratio for the 63 countries it tracks ticked down slightly in May to 79.6 percent, compared to 80 percent in April. The figure is 0.9 percentage points lower than last year.


Overall, the association predicts that steel use will increase by 2.9 percent to 1,454 Mt in 2013, a significant improvement over 2012’s growth of 1.2 percent. Much of the demand will be driven by China, which is expected to consume 668.8 Mt this year, a 3.5 percent increase over 2012. India is also forecast to increase its demand by 5.9 percent to 75.8 Mt. The largest rebound will be in Central and South America, which the association estimates will use 6.2 percent more steel in 2013, or 49.8 Mt. In addition, the group projects that demand will rise by 3.2 percent in 2014 to reach 1,500 Mt.


Fiscal and economic uncertainty in the U.S. will temper steel utilization, limiting growth to 2.7 percent for an expected demand of 99.3 Mt. This is a major slowdown compared to 2012’s 8.4 percent growth, which was driven by a rise in auto production, development of energy projects, and a strengthening construction market.


The World Steel Association represents approximately 170 steel producers, including 17 of the world’s 20 largest steel companies, national and regional steel industry associations, and steel research institutes. Its members represent 85 percent of global steel production.


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