Oct global crude steel production falls 10% on year: worldsteel

Global crude steel production fell 10% year on year in October to 145.7 million mt, the third consecutive year-on-year drop as output in China dropped for the fifth straight month, weighing on volumes, according to World Steel Association data published Nov. 23.

However, the global production was 0.9% higher than September’s 17-month low.

Largest producer China produced 71.6 million mt of crude steel in October, down 22% year on year and falling 2.9% on the month to the lowest monthly volume since February 2019.

October was also the first month since March 2018 that China produced less than 50% of total global crude steel, at 49.14% of the total share.

“China is a clear player in the world market, and their reduced production has had a general impact on global production. I can’t believe that a [Chinese] production increase is possible, but I know some volumes are exported from China from what can’t be sold in the Chinese market. They’d like to support domestic prices,” a German mill source told S&P Global Platts.

The world’s second-largest steel producer India increased output in October by 2.4% year on year and 2.6% month on month to 9.8 million mt.

Production from Japan climbed 14% on the year and 1% from September to 8.2 million mt, while output from the US also rose 21% year on year and 2.8% month on month to 7.5 million mt.

Russia is estimated to have produced 6.1 million mt, up 0.5% year on year and a 3.4% month on month increase, while output from South Korea dropped 1% on the year to 5.8 million mt, although this was 6.2% higher than the previous month.

European production rises

Crude steel production in the whole of Europe, including the UK, climbed 6.8% year on year to 17.8 million mt, which was also up 5.2% month on month.

Germany, the largest European steel producer, produced 3.65 million mt, up 7% year on year and 9.4% month on month.

The European market has been contending with a surplus of steel as automobile manufacturers relinquish steel volumes on the back of falling demand from the ongoing semiconductor and chip shortage, resulting in reduced automobile production.

The return of large automotive orders has resulted in speedier delivery from mills for as early as December — two months earlier than expected.

Sources have expressed their concern about ramping up production amid the ongoing auto demand crisis. In response to this, some producers were heard to temporarily suspend their galvanizing lines until there is further clarity on real European demand for steel.

“I don’t know what to think of mills ramping up production. It’s risky, but perhaps they want to catch as much volume as possible before there is a real collapse,” a UK trading source told Platts.

Turkey, Brazil increase output

Meanwhile, Turkey produced 3.5 million mt, up 8% on the year and 4.9% higher than September’s volume.

Brazil’s estimated output rose 10% year on year to 3.15 million mt, which was down 3.2% from the previous month, while Iran’s estimated production fell 15% on the year to 2.2 million mt, although climbed 75% month on month.

Iron produced in blast furnaces worldwide in October amounted to 100.9 million mt, down almost 12% year on year and 1.4% lower than the previous month.

Production of direct reduced iron climbed 9.5% year on year to 9.1 million mt in October, which was also 3.5% higher on the month.

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

— Jacqueline Holman, Amanda Flint