WSA: Global Steel Production Returns to Growth, Prices Increasing

The U.S. steel industry was not alone in experiencing tough years in 2015 and 2016, according to the Financial Times.
Click Here for Current Metal Prices
Compared to 2015, production fell last year in Japan, Russia, South Korea, Germany and Brazil. Among the top 10 producer countries, production increased only in China, Ukraine and Turkey, according to the World Steel Association. Supported by a sharp upturn in real estate investment, steel prices and steel production rose by 1.2% in China, reversing the previous year’s decline. China produced 808.4 million metric tons in 2016 and domestic demand continues to remain robust even as exports face protectionist headwinds.

The world’s number two producer, Japan, however suffered a decline in 2016 of 0.3% to 105 mmt as the third largest steelmaker, India, closed the gap with a whopping 7.4% increase in output to 95.6 mmt. India overtook the U.S. in 2015 when it produced 89 mmt of steel compared to the U.S.’s 78.84 mmt, and is expected to pass Japan in 2017 or ’18 according to the Financial Express as it ramps up output closer to its 122 mmt of capacity. The Indian government has targeted capacity of 300 mmt by 2030 to meet domestic demand from infrastructure and consumption from a rising middle-class.
Despite rising raw material costs last year, many steelmakers remained profitable as both demand and finished steel prices rose. The extent to which we can expect further price increases in 2017 remains to be seen with coking coal prices easing and seaborne iron ore prices currently range bound, but early indications are, with regional variations, that there are likely to be positive price increases this year.
Two-Month Trial: Metal Buying Outlook
The U.S. has benefited from solid demand and the impact of some anti-dumping measures, trends that are likely you have an even greater impact in 2017 is the new administration implements its campaign pledges. A recent survey of leading analysts by the FT suggested that U.S. steel output will increase by 4.4% this year.

Leave a Reply

Your email address will not be published.

Scroll to Top