Global crude steel production increased 3.4% in August on a year-over-year basis, the World Steel Association reported.
Production for the month reached 156 million tons, according to the World Steel Association report, which collects production data from 64 countries.
The 3.4% increase comes after a 1.4% year-over-year increase the previous month.
Broken down by individual countries, top steelmaker China produced an estimated 87.3 million tons, up 9.3% on a year-over-year basis — a sharp jump from last month’s 5% year-over-year increase.
As Stuart Burns explained yesterday, China’s production in recent years has continued to rise despite mandated production closures aimed at mitigating high pollution levels in many parts of the country. Production cuts were at first mandated by Beijing, but last year local authorities were set their own production cut levels.
“Fears are therefore rising that China could be on track to create a glut this winter despite the now normal winter closures,” Burns wrote.
“China’s rivals in southeast Asia are looking on warily concerned that rising exports will further depress regional prices as the domestic market fails to absorb the anticipated record output.
“That’s not good news for the rest of the world.
“Even markets protected by high tariffs like the U.S. will be dragged down by lower global prices and imports undercut domestic U.S. mills.”
As the winter heating season approaches in China, the scope of this year’s production cuts will prove to be a critical factor monitored by steel-producing nations around the world.
Elsewhere, Japan produced 8.1 million tons in August, down 7.8% year over year. South Korea’s crude steel production fell 2.6% to 5.9 million tons in August 2019.
In Europe, German production ticked up 0.8% to 3.3 million tons, while Italy’s production plunged 26.7% to 900,000 tons. France produced 1.1 million tons, up 11.2% year over year, while Spain’s production dropped 4.6% to 1.1 million tons.
U.S. production, meanwhile, hit 7.5 million tons, up 0.3% on a year-over-year basis.
According to the America Iron and Steel Institute (AISI), U.S. steel production for the year through Sept. 28 reached 72.6 million tons, up 3.4% compared with the same period last year.
The U.S. steel sector’s capacity utilization rate checked in at 80.6% for the year through Sept. 28.
U.S. steel prices have been on the decline of late.
The U.S. HRC price is down 5.13% over the last month, down to $555/st as of Monday. U.S. CRC is down 1.98% to $741/st, while U.S. HDG is down 4.4% to $804/st.
The drop for plate has been even steeper, as U.S. plate is down 7.65% to $736/st.