Global steel output declines by 8.7% in May

Global crude steel output is estimated at 148.8 million tonnes in May. This represents a decrease of 8.7 percent, year-on-year. The reduction was not as dramatic as the 13.4 percent recorded in April, at the peak of the Covid-19 lockdown measures.

The data relates to the output of the 64 countries that report to worldsteel – covering approximately 99 percent of global crude steel production. The collection of output statistics remains challenging, due to the coronavirus pandemic, with production for May estimated in many countries. Nonetheless, the Brussels-based association was able to ascertain last month’s figures for several of the world’s largest steel-producing nations.

Steel output continues its inexorable rise in China, whereas large reductions in production are being witnessed in many other countries. Chinese mills manufactured 92.3 million tonnes of crude steel in May – up 4.2 percent, year-on-year.

Elsewhere in Asia, steel production in Japan (5.9 million tonnes) and India (5.8 million tonnes) tumbled by 31.8 and 39.1 percent, respectively, compared with the May 2019 figures. Meanwhile, output at South Korean steelmakers was just below 5.4 million tonnes last month – down 14.1 percent, relative to a year ago.

Steelmaking in the United States totalled 4.8 million tonnes in May, a similar figure to that recorded in April, and equivalent to a reduction of 36.6 percent, year-on-year. Output cuts supported a recovery in steel prices, in the domestic market, from early May, but the revival has run out of steam in recent weeks.

Mills in Brazil produced approximately 2.2 million tonnes of crude steel, last month. This is down 22.6 percent, compared with the May 2019 outturn. Shipments from the country’s mines have also been curtailed by the coronavirus pandemic. This is helping to maintain iron ore prices above US$100 per tonne, CFR China.

Demand downturn

In a recent release, worldsteel predicts that global finished steel demand will decline by 6.4 percent, in 2020, year-on-year. China, which consumes more steel than the rest of the world combined, is forecast to record a modest gain in demand this year. In contrast, steel consumption in the developed economies is expected to reduce by 17.1 percent.

Commenting on the outlook, Mr Al Remeithi, Chairman of the worldsteel Economics Committee said,

The Covid-19 crisis, with its disastrous consequences for public health, also represents an enormous crisis for the world economy. Our customers have been hit by a general freeze in consumption, by shutdowns and by disrupted supply chains. We therefore expect steel demand to decline significantly in most countries, especially during the second quarter. With the easing of restrictions that started in May, we expect the situation to gradually improve, but the recovery path will be slow.

The World Steel Association (worldsteel) represents steel producers, national and regional steel industry associations, and steel research institutes. Its members are located in every major steel-producing country and represent around 85 percent of global steel production.