Global steel output up in August, China's rises 12.8 pct
Post Date: 24 Sep 2013 Viewed: 376
Global crude steel production rose 5.2 percent in August from a year earlier as China recorded its first month of double-digit growth since November 2012 despite Beijing's efforts to tackle the country's steel glut.
Crude steel output hit 130 million tonnes in August with output in China alone hitting 66.3 million, up 12.8 percent from a year earlier, World Steel Association data showed on Friday.
China, whose stocks of five major steel products sat at 14.61 million tonnes as of Sept 13, continues to produce more steel than it consumes - constraining a steel price recovery both inside China and globally.
"The China situation will continue to dampen the mood for years ahead until China can bring production into line with consumption," MEPS steel analyst Jeremy Platts said. China produces half of the world's steel and is also the world's top consumer.
In a bid to curb its estimated 300 million tonne surplus steel capacity, Beijing is limiting the sector's access to credit, though experts say it will take a long time before such reforms are effective.
Nevertheless, a modest recovery in the global economy, regional supply disruptions and a drawdown on steel stocks outside China has helped global steel prices slowly recover from 3.5-year lows hit in June.
"We don't expect a great increase in demand for the rest of year, but we're more positive for 2014. Inventories are quite low, so any kind of pick-up (in demand) is going to automatically feed through to buying and increased prices," said Platts.
Experts see any steel price recovery as fragile given China's overcapacity is still equivalent to nearly twice the output of the European Union last year. Output in Japan, the world's third-largest producer, decreased 0.6 percent in August to 9.1 million tonnes, the data showed.
In the EU, output rose by 1.3 percent to 12.03 million tonnes, due in part to 4 percent growth in Britain, where Thailand's SSI has boosted production at its Teesside plant. Output in the region's top producers Germany and Italy continued to contract by 6.3 percent and 7.5 percent, respectively.
"European crude steel output in August 2013 is still below the 12.75 million tonnes seen in August 2011," said Sucden Financial analyst Kashaan Kamal. The United States, another large producer, registered a 2.9 percent fall in August production to 7.4 million tonnes.