Global crude steel output rose for a sixth consecutive month in
July as gains across China and the U.S. offset a decline in the
European Union - according to a recent World Steel Association
("WSA") report. Healthy gains across the Middle East and Africa
also supported the growth. However, the pace of growth slowed on a
monthly basis in the reported month.
According to the international trade body for the iron and steel
industry, crude steel production for 65 reporting nations nudged up
1.7% year over year in July to 137 million tons (Mt). This follows
a 3.1% gain last month.
By regions, production data paints a generally positive picture
with gains registered across all areas barring the European Union.
Growth was seen across major Asian producers except Japan - the
second largest producer - which saw a flat production at 9.3 Mt.
Higher sales tax is affecting steel demand in that country. Output
from China - the world's biggest steel maker - went up 1.5% year
over year to 68.3 Mt in July. Production in India, the
fourth-largest producer, rose 1.7% to around 7 Mt. South Korea
raked in a 6.2% gain to 5.9 Mt. Consolidated output were up 1.7% to
92.4 Mt in Asia.
In North America, crude steel production rose 2.3% to 7.6 Mt in the
U.S. - the third-largest steelmaker. Output in Canada went up 5.7%
to around 1.1 Mt. Overall production for the region was up 2% to
roughly 10.4 Mt.
In the Europe Union, production from Germany - the biggest producer
in the region - rose 1.5% to 3.4 Mt. Output fell 3.6% in Italy to 2
Mt while rising 1.6% to 1.4 Mt in France. Spain saw a 5.9% rise to
1 Mt. Production slipped 4.4% in the UK to around 1 Mt. Total
output dipped 2% in the European Union to 13.3 Mt.
Output in the Middle East moved up 8.3% to 2.4 Mt with healthy
gains witnessed across Iran, Qatar and Saudi Arabia. Africa logged
a solid 21.2% gain to 1.5 Mt in the reported month.
Among other notable producers, production from Turkey was up 1% to
2.8 Mt. Russia saw a healthy 8.1% rise to 6.2 Mt while Ukraine -
which have been battered by fierce conflict with Russia - recorded
a 11.7% decline to 2.5 Mt. Output from Brazil, the largest producer
in South America, inched up 0.5% to 2.9 Mt.
Crude steel capacity utilization ratio for the reporting countries
was 75.4% in July 2014, down from 76.6% a year ago and 78.3% in the
Steelmakers globally remain hobbled by challenging market
fundamentals and weak pricing. Overcapacity in the industry, a
flood of cheap imports and weak demand in Europe hammered steel
prices for the most part of 2013, hurting margins of major
producers including ArcelorMittal (
), U.S. Steel (
), Nucor (
) and AK Steel (
With the global economy gradually on the mend and activities
picking up in the construction sector, 2014 promises to be a
transition year for the steel industry. The WSA sees continued
recovery in steel demand and expects global steel usage to increase
3.1% this year and further rise 3.3% in 2015. Improving demand is
also expected to jack up steel prices.
However, the industry faces challenges in form of an expected
deceleration in steel usage in China due to a slowdown in the
country's housing market and weaker infrastructure investment
Nevertheless, a gradually healing economy, strength in the
automotive market and a rebound in non-residential construction and
housing markets should provide a much-needed thrust to the U.S.
steel industry this year. Moreover, an expected rise in steel usage
in the Euro-zone on the back of a flourishing auto sector and a
recovering construction market looks encouraging after a lumpy
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