Global steel production significantly dropped in recent times

by David Fleschen

The World Steel Association reported yesterday that global steel production fell 8.9% year-on-year in September to 144.4 million tons, or 4.66 million tons per day. These are the lowest levels since April 2020, and the decline is almost entirely due to China, where production has slumped by more than 20% due to ordered cutbacks. The Chinese data were already published by the National Bureau of Statistics early last week (see Daily Info Commodities of October 19). China's share of global steel production has now fallen to 51%. In spring it was still at 58%.

The major producing countries behind China, such as India, Japan and the USA, mostly produced significantly more steel in September. In the first three quarters, 1.46 billion tons of steel were produced worldwide, almost 8% more than in the corresponding prior-year period. Even if steel production in the current quarter were to remain at the low September level, extrapolated to the full year a record amount of steel would still be produced (around 1.9 billion tons). This would be enough to meet the World Steel Association's expected demand of 1.86 billion tons for this year.

In Europe, steel prices now appear to have ended their record chase: Hot- and cold-rolled steel prices have fallen in recent weeks, retreating 19% and 14% respectively from their record highs in mid-August. Hot-rolled steel currently still costs EUR 1,000 per ton, cold-rolled steel EUR 1,170 per ton. Prices for iron ore and industrial metals are also currently rather weak: Iron ore is sliding below USD 120 per ton, and the LME industrial metals index is trading at 4,500 points, more than 5% below its record high of the week before last.

Source: Commerzbank Research, Photo: Fotolia

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