Global steel production down 3.5% on year in May: worldsteel

Global crude steel production totaled 169.5 million mt in May, down 3.5% from May 2021, according to World Steel Association data published June 22.

However, May global production was 3.7% higher than the previous month.

Output from January through May totaled 791.8 million mt, down 6.3% from a year ago, the data showed.

Largest steelmaker China produced 96.6 million mt in May, down by 3.5% from a year ago, but up 4.1% month on month to the highest since last May, making up 57% of total global crude steel output.

Total steel produced in China from January through May was 435 million mt, down 8.7% year on year.

China’s manufacturing production index for steel consumption produced by S&P Global Commodity Insights stood at 110 points in May, 9 points higher than in April but still down 5 points from the same period of 2021.

Despite further improvement seen in China’s manufacturing activity in June, the strength of the recovery has remained sluggish, leading to the recent sharp drop in steel prices, industry sources said.

The world’s second-largest steel producer India was the only top 10 producer that saw its production grow year on year in May, rising 17.3% to 10.6 million mt in May, which was also up 4.7% month on month.

For the January-May period, India’s output rose 6.5% to 53.2 million.

All other top 10 steel producing countries saw output decrease.

Japan’s May production totaled 8.1 million mt, down 4.2% on the year, but up 8% from April to a seven-month high, with the January-May output down 3.5% on the year to 38.5 million mt, the data showed.

May output from the US fell 2.6% year on year to 7.2 million mt, but climbed 4.7% on the month to a seven-month high. The US’ January-May output was down 3.4% to 16.4 million mt.

Russia was estimated to have recorded a year-on-year decline of 1.4% to 6.4 million mt in May, although this was 0.5% higher than April’s volume to also a seven-month high.

The country’s production was also down 2.3% during the first five months of the year to 31 million mt.

South Korea produced 5.8 million mt of crude steel in May, down 1.4% year on year, but up 5.1% month on month to a four-month high, with the Jan-May volume down 3.4% on the year to 28.2 million mt.

High energy costs dent demand in Europe

Germany, the largest steel producer in Europe, saw its crude steel production fall 11.5% in May to 3.2 million mt and 2.5% month on month as high energy costs dented demand, while there was also a lack of demand from the auto sector due to the ongoing semiconductor chip shortage.

From January to May German steel production dropped 4.8% to 16.4 million mt year on year, the data showed.

In the whole of Europe, including the UK, crude steel production fell 5.5% in May to 17.1 million mt, although this was up 1.3% from April and at a six-month high. The Jan-May volume was 82.5 million mt, dropping 4.1% on the year.

Turkey also produced 3.2 million mt in May, down 1.4% on the year and 4.6% lower than April’s volume. Production for the first five months of the year was down 2.8% on the year to 16 million mt.

Brazil produced 3 million mt in May, down 4.9% year on year, but up 1.7% from April, while Iran saw the biggest year on year fall of 17.6% to 2.3 million mt, although this was also up 3.4% from the previous month.

Production of pig iron from 38 countries was 116.6 million mt in May, down 1.3% year on year, but up from 111.9 million mt in April at a 12-month high, the data showed.

Direct reduced iron produced worldwide in May amounted to 9.7 million mt, rising 5.2% year on year and up 1.9% from April to the highest level since March 2021, according to worldsteel.

Asian hot-rolled coil prices were mixed June 21 as offers improved slightly in tandem with Chinese futures and domestic prices, while fundamental demand improvement remained absent.

The SS400 HRC 3 mm thick grade of coil was assessed down $2/mt day on day at $675/mt FOB China, and down $7/mt over the same period at $648/mt CFR Southeast Asia.

Crude steel data covers the 64 countries that report to worldsteel, accounting for about 98% of the world’s crude steel production.

— Annalisa Villa, Jacqueline Holman