Global crude steel output static in October vs last year, Worldsteel says

Global crude steel output was unchanged year on year in October 2022 at 147.3 million tonnes the World Steel Association (Worldsteel) said Tuesday November 22.Output in October decreased by 2.84% to 147.3 million tonnes from 151.6 million tonnes in September, according to the association’s corrected monthly statistics.

In October, steel production in Asia and Oceania, the Middle East and Africa increased. Output in Europe, the Americas, Russia with Commonwealth of Independent states and Ukraine decreased from the same month last year.

A double-digit increase in output from China and moderate increases in India and Iran were offset in October by similar double-digit output decreases from Turkey, Germany, South Korea, Russia and Japan. Production in the US and Brazil declined slightly.

In the first 10 months of the year, world crude steel output decreased by 3.9% from a year earlier to 1.55 billion tonnes, with all regions except the Middle East contributing to the cumulative contraction.

At the same time, out of the 10 largest steel-producing countries, only India and Iran achieved a year-on-year increase in January-October output. All the other countries registered decreases in output, with Turkey recording the largest drop.

Interest-rate rises to combat global inflation, Russia’s invasion of Ukraine, China’s economic downturn and resurging cases of Covid-19 have all hit yearly steel production results.

According to Worldsteel’s short-term outlook, steel demand will contract by 2.3% in 2022 to 1.7967 billion tonnes after it increased by 2.8% in 2021. In 2023, it expects steel demand to recover by 1.0% to 1.8147 billion tonnes.

Steel output in China decreased in early November due to multiple outbreaks of Covid-19 and subsequent lockdown restrictions.

Market participants expect rebar demand to stay weak for the rest of 2022 because investment in the real estate sector continues to fall. In October, Chinese margins for producers were reportedly at or below breakeven.

Steel production in India, the world’s second-largest steelmaker, has increased in the first 10 months of 2022, rising by 6.1%.

The removal of India’s export duties on steel and steelmaking raw materials, effective November 19, should boost exports but weak demand from major foreign outlets may limit steel output growth opportunities.

Reduced output of crude steel so far this year in Japan mainly reflects weak demand from downstream industries such as automotive, construction and shipbuilding.

Japan’s government has asked companies and households to conserve electricity from December 1 until March 31 next year amid fears of a power shortage given that Japan is heavily reliant on energy imports. The likely outcome is that weak demand will persist and that steel production in December will fall.

United States
Worldsteel expects crude steel production in the US to fall, with mills operating at an average capacity utilization rate of 73-73.5% in November.

At the same time, some US steelmakers are bullish for 2023.

South Korea
Domestic steelmakers Posco and Hyundai Steel are likely to recover completely from typhoon-related production cuts in the first quarter of 2023.

Still, prolonged labor strikes may weigh further on November steel output.

Crude steel output in Germany continued to decline year on year in October 2022, marking the eighth consecutive month of decline.

Output was lower due to several recent steel production cuts announced by German mills to balance the oversupplied steel market, especially in the flat steel market.

Sluggish end-user consumption and a pessimistic outlook subdued market activity but producers expect price increases ahead of holiday closures.

In October, steel output from Turkey fell by 17.7% year on year, marking the largest monthly decline out of the 10 top steelmaking countries.

Reduced capacity utilization in Turkey was due to continued rises in energy costs as well as overall weak demand for finished steel, which is not set to improve in the coming months.

Due to a lack of finished steel sales, some mills were reportedly keeping their production lines idle, either running maintenance or planning to do so soon. Other mills either reduced operating hours or worker shifts.

The end of the year is usually the seasonal weak season for demand in Brazil, with the country’s productivity this month possibly affected by the Qatar 2022 World Cup, which started on November 20.

Iran usually suffers from a shortage of natural gas during winter, which affects steel output. This seasonal shortage has not started yet but is likely to come in December of this year or January next year.

Out of all steel-producing countries, Ukraine’s output and exports of raw materials and steel products registered the largest decreases, due mostly to its war with Russia.

In January-October, steel output in Ukraine was 5.84 million tonnes, while pig iron output was 5.81 million tonnes, a 67% year-on-year reduction.

The continued production of metals in Ukraine has been thrown into question following Russia’s largest missile attack to date on the country’s energy infrastructure in November.

Published by: Elina Virchenko