Global steel production down 6.8% on-year in Q1 to 456.6 mil mt

Global crude steel production fell 5.8% year on year in March to 161 million mt, bringing total output for the first quarter of 2022 to 456.6 million mt, down 6.8% fron the same period in 2021, according to World Steel Association data published April 22.

However, the March global production was 13% higher than February’s volume.

Largest producer China produced 88.3 million mt of crude steel in March, down 6.4% year on year, but rising 17.7% on the month and comprising 54.8% of total global crude steel output.

Total steel produced in China in Q1 was 243.4 million mt, down 10.5% year on year.

The world’s second-largest steel producer, India, increased output in March by 4.4% year on year and 7.9% month on month to 10.9 million mt, with Q1 production also up 5.9% year on year to 31.9 million mt.

The only other top-10 producer who saw production rise in March was Brazil with an estimated 3 million mt, up 5.4% year on year and 11.1% higher from the previous month. However, overall Q1 production was down 2.2% on the year to 8.5 million mt.

March production from Japan fell 4.3% on the year, but rose 9.6% from April to 8 million mt, with Q1 output also down 2.9% on the year to 23 million mt, the data showed.

Output from the US dropped 1.7% year on year, but climbed 9.4% month on month to 7 million mt in March, bringing the Q1 total to 20.3 million mt, down 0.4% from the same 2021 period.

Russia was estimated to have produced 6.6 million mt in March, down 1.8% year on year, but up 13.8% month on month, with quarterly production down 1.2% to an estimated 18.7 million mt.

Output from South Korea dropped 6.1% on the year in March to 5.7 million mt, although this was 9.6% higher than the previous month.

European production down

Crude steel production in the whole of Europe, including the UK, fell 7% year on year to 17 million mt in March, although this was up 8.9% month on month. Q1 production for the region totaled 48.7 million, down 3.9% from the same quarter in 2021.

Germany, the largest European steel producer, produced 3.3 million mt in March, down 2.9% year on year, but up 3.1% month on month.

The European steel market has been impacted in recent months by a lack of demand from the auto sector due to the ongoing semiconductor and chip shortage restricting vehicle production.

“I heard automotive have cancelled a lot of orders from mills so there’s a lot of open capacity,” a Nordic buyer source told S&P Global Commodity Insights.

“With competitive imports and buyer resistance to the current price levels, we may see prices come down in response to stimulate demand and fill capacities,” he added.

High energy prices have also been impacting production in Europe, with a Northern Service Center previously telling S&P Global that production levels were falling, and electric arc furnace mills were reducing shifts due to energy prices, with recent COVID-19 waves also not helping.

“I’ve heard some staff operating at 40% of their usual workforce. With high scrap prices and additional inflation from gas and electricity costs, EAF mills look to be in really big trouble,” the source said.

A northern mill source expected production to continue to fall in Europe over the next few months, especially due to a gas supply issue, which was making suppliers concerned over whether they’d be able to maintain production.

“Semi-conductors are still a problem, but orderbooks from automotive are still relatively full — production capacity can’t fall too far against these existing orders,” the source said.

Meanwhile, Turkey produced 3.3 million mt, down 2.9% on the year, but 10% higher than February’s volume.

Production of pig iron in March was 108.5 million mt, down from 115.9 million mt in March 2021, but up from the previous month’s 97.1 million mt.

Direct reduced iron produced worldwide in March amounted to 9.2 million mt, compared with 9.8 million mt a year ago and 8.1 million mt in February.

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

— Jacqueline Holman, Benjamin Steven