Global crude steel production rose narrowly in February following a decline a month ago as gains across Asia, Europe and the Middle East capped declines in North and South America, according to a recent World Steel Association (“WSA”) report. The gain came on the heels of higher production in China – the world's biggest steel producer.
The international trade body for the iron and steel industry noted that crude steel production for 65 reporting nations crept up 0.6% year over year in the reported month to 125 million tons (Mt). This compares favorably with a 0.4% fall in January.
By regions, steel output moved up across Asia, European Union, Other Europe, the Middle East, Africa and Oceania while falling in North America, South America and the C.I.S.
Growth was seen across major Asian producers barring India, the fourth-largest producer. Output from China went up 0.4% year over year to 62.1 Mt in February following a 3.2% decline last month due to sluggish industrial activities ahead of new year holidays.
Japan (the second largest producer) saw a 1.4% gain in output to 8.4 Mt. Production in India, however, slipped 3.2% to around 6.3 Mt. South Korea raked in a 6.2% gain to 5.3 Mt. Consolidated production went up 0.6% to 83.7 Mt in Asia.
In North America, crude steel production in the U.S. – the third-largest steelmaker – dipped 1.7% to 6.7 Mt. Output in Canada and Mexico fell 9.3% and 1.5%, respectively, to around 1 Mt and 1.4 Mt, respectively. Overall production for the region was down 2.7% to roughly 9.1 Mt.
In the Europe Union, production from Germany was up 4.2% to 3.6 Mt. Output rose 16.6% in the UK to 1 Mt while declining 3.9% to 1.2 Mt in France. Italy and Spain saw a 3.6% and 10.2% gain in production, respectively, to 2.2 Mt and 1.2 Mt, respectively. Production from Turkey went up 0.7% to 2.7 Mt. Total output rose 4.7% in the European Union to 13.9 Mt.
Output in the Middle East rose 6.9% to 2.2 Mt with gains witnessed across Iran, Qatar and Saudi Arabia. Africa recorded a 7.7% gain to 1.2 Mt riding on a 19.3% rise in South Africa.
Among other notable producers, production fell 3.1% in Russia to 5.3 Mt while rising 1.2% to 2.6 Mt in Brazil. Ukraine registered a 10.7% decline to 2.3 Mt.
Crude steel capacity utilization ratio for the reporting countries was 77.6% in February, down from 79.6% a year ago. The ratio, however, improved from 74.4% in Jan 2014.
Steelmakers globally suffered the pangs of challenging steel market fundamentals, European debt predicament and weak pricing for the most part of 2013. Steel prices were hobbled by overcapacity in the industry and weak demand, crimping margins of major producers including ArcelorMittal (MT - Free Report) , U.S. Steel (X - Free Report) , Nucor (NUE - Free Report) and AK Steel (AKS - Free Report) .
According to the WSA, world crude steel production rose 3.5% year over year to 1,607 Mt in 2013 as gains across Asia, Middle East and Africa more than offset declines in other regions.
With the global economic recovery gathering steam and activities picking up in automotive and construction sectors, prospects look healthy for the steel industry in 2014. The WSA sees continued recovery in steel demand and expects global steel usage to increase 3.3% this year factoring in higher contributions from developed economies. Improving demand is also expected to perk up steel prices.
A gradually healing economy, strength in the auto sector and a rebound in non-residential construction and housing markets are expected to help pull the U.S. steel industry out of its funk in 2014. Signs of stabilization in steel usage in the Euro zone also look encouraging after a bumpy 2013, which bode well for recovery prospects this year.