Global crude steel production expanded for the first time since February in the three months through September. This data comes from the World Steel Association (WSA), which defines crude steel as, “steel in its first solid (or usable) form: ingots, semi-finished products (billets, blooms, slabs), and liquid steel for castings.”
Figure 1 shows annualized monthly global steel production on a three-month moving average (3MMA) basis and capacity utilization since January 2000 based on the updated OECD capacity data. Capacity utilization in September on a 3MMA basis was 79.6 percent. On a tons-per-day basis, production in September was 5.212 million metric tons. Daily production has increased for five straight months and is approaching June 2019’s all-time high of 5.318 million metric tons.
Figure 2 shows the year-over-year growth rate of the 3MMA of global production since January 2013. Growth in three months through September on a year-over-year basis was positive 1.6 percent, up each month from negative 9.2 percent in June.
Table 1 shows global production broken down into regions, the production of the top 10 nations in the single month of September, and their share of the global total. It also shows the latest three months and 12 months of production through September with year-over-year growth rates for each period. Regions are shown in white font and individual nations in beige. The world overall had positive growth of 1.6 percent in three months and negative growth of 2.3 percent in 12 months through September. When the three-month growth rate is higher than the 12-month growth rate, as it was in September, we interpret this as a sign of positive momentum. On the same basis in September, China grew by 10.0 percent and 4.9 percent, and therefore also had positive momentum.
Table 1 shows that North America was down by 20.4 percent in the three months through September. Within North America, production was down by 21.8 percent in the U.S., down by 27.2 percent in Canada and down by 7.9 percent in Mexico. (Canada and Mexico are not shown in Table 1 and the North American total includes Cuba, El Salvador and Guatemala.)
In the 12 months through September, 103.2 million metric tons were produced in North America, including 77.1 million tons produced in the U.S., 11.1 million tons produced in Canada and 16.5 million tons produced in Mexico. Based on the latest OECD capacity data, U.S. capacity in 2019 was 109.7 million metric tons and capacity utilization that year was 80.0 percent.
Figure 3 shows China’s production since 2005. In the single month of August, China’s steel production was at an all-time high of 94.8 million tons. Production declined in September to 92.6 million tons, mainly because there was one less day in the month. China’s capacity is now 1.152 billion metric tons, down from 1.215 billion tons in January 2015. September capacity utilization was 91.3 percent, which as a result of the capacity reduction and production increases was up from 67.3 percent in January 2015.
Figure 4 shows the growth of China’s steel production since March 2013 and Figure 5 shows the growth of global steel excluding China on the same scale, both on a 3MMA basis. In September, the rest of the world contracted by 6.9 percent as China grew by 10.0 percent, year over year.
Figure 6 shows China’s share of global steel production, which in the single month of September was 59.2 percent.
NOTES: On June 24, 2020, the OECD released its updated report of steel production capacity by nation. “Global steelmaking capacity (in nominal crude terms) decreased from 2015 to 2018, but the latest available information (as of December 2019) suggests that capacity increased in 2019 for the first time since 2014. The OECD has revised its 2019 figures for global steelmaking capacity to 2,362.5 million metric tonnes (mmt) to incorporate new information on closures that was not previously available as well as updated information on the status of certain investment projects. Moreover, revisions to the aggregate capacity figures for the People’s Republic of China, the United States, Mexico, Japan, Korea, and several other economies’ data contributed to the upward revision for 2019 and previous years. The net capacity change in 2019, taking into account new capacity additions and closures, represents a 1.5% increase from the level at the end of 2018.”
WSA released its short range forecast on June 4, 2020. They anticipate that global production will be down by 6.4 percent in 2020 and up by 3.8 percent in 2021. On the same basis, North America will be down by 20.0 percent and up by 6.2 percent.
WSA represents approximately 85 percent of the world’s steel production. The OECD has taken over responsibility for tracking global steel capacity and its latest update, for 2019, was released in June 2020.
Peter WrightRead more from Peter Wright
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