Global crude steel production rose in October on the heels of
gains across China, Japan and the U.S., according to a recent
World Steel Association ("WSA") report. The international trade
body for the iron and steel industry said that crude steel output
for 65 reporting nations rose 6.6% year over year in October to
134 million tons (Mt). This compares favorably with a 6.1% rise
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China, the world's largest steel producer, produced 65.1 Mt of
crude steel in the reported month, a 9.2% year over year rise. By
regions, steel output moved up across the European Union, Other
Europe, North America, Asia, Africa and the Middle East, while
falling in the C.I.S., South America and Oceania.
Growth was witnessed across major Asian producers. While China
logged a healthy gain, Japan (the second largest producer) racked
up a 7.7% increase in output to 9.5 Mt. Production crept up 1.6%
to 6.8 Mt in India while rising 5.2% to 5.9 Mt in South
In North America, crude steel production went up 8.7% to 7.4 Mt
in the U.S., the third-largest steelmaker. Output in Canada fell
1.7% to 1.1 Mt while increasing 1.7% to 1.6 Mt in Mexico.
In the Europe Union, output from Germany moved up 1.9% to 3.8 Mt
while climbing 17.9% to 1.1 Mt in the UK. Production fell 1.8% in
France and 10.1% in Italy to roughly 1.3 Mt and 2.2 Mt,
respectively. Spain and Turkey saw a 23.9% and 6.9% rise in
output, respectively. Overall output rose 4% in the European
Union to 14.7 Mt.
Among other notable producers, output went down 2.8% and 1.5% in
Brazil and Russia, respectively, to roughly 3 Mt and 5.7 Mt,
respectively. Ukraine registered a 1.2% increase to 2.6 Mt.
The WSA noted that crude steel capacity utilization ratio for the
reporting countries rose to 77.5% in October from 75% a year ago.
The ratio, however, declined from 79.3% in Sep 2013.
Steel makers globally are grappling with weak prices due to soft
demand and overcapacity in the industry. Moreover, steel
producers have been hobbled by rising prices of key raw materials
such as iron ore and coking coal.
Last year, a sluggish construction market, oversupply in the
industry, challenging conditions in Europe and slowing growth in
emerging economies weighed on the performance of major
). Lower steel prices hurt margins of these steel players.
According to the WSA, world crude steel production rose 1.2% year
over year to clock 1,548 Mt in 2012. Global steel demand is
expected to improve gradually this year and the next.
The WSA envisions global steel usage to increase 3.1% this year,
an improvement from a 2% rise in 2012. The optimism reflects a
recovery in demand driven by emerging economies. The demand
scenario looks brighter in 2014 as the industry body anticipates
steel usage to grow 3.3% factoring in higher contributions from
the developed economies.
Strength in the auto sector and a turnaround in non-residential
construction and housing markets are expected to aid to growth in
the U.S. Moreover, efforts of the Chinese government to rebalance
its economy will contribute to the domestic and global steel
demand. However, the Eurozone crisis remains as overhang on the