The terrible slump in the world steel industry looks like it is almost over, thanks mostly to China, but also to slowly rising demand in other major economies.
Figures from the World Steel Association for August for the 66 countries where steel groups report (representing 85% of output each year), showed a rise on July of around 2.5 tonnes to 106.5 million tonnes, the highest monthly output so far this year.
More importantly, it was only 5.5% lower than in August 2008, after being down 11% in July and 16% in June from the same months a year ago.
As production from a year ago from now on, started sliding its conceivable that it could reach or even top those levels in November and December.
Certainly by the first quarter of next year world crude steel output will be significantly ahead of levels in the first quarter of this year because they were so depressed by the recession.
It’s good news for the global economy, and good news for companies like BHP Billiton and Rio, not to mention Fortescue and a host of smaller iron ore hopefuls and coal miners.
And it’s all down to China where steel production for August 2009 was 52.3 million tonnes (mt), 22.0% higher than August 2008.
It was the highest amount of crude steel China has ever produced in a month and the second month in a row that crude steel production has been over 50 million tonnes.
It was also the second month in a row that China’s production made up almost 50% of the reported crude steel output around the world.
The World Steel Association said that elsewhere in Asia, Japan produced 8.3 mt of crude steel in August 2009, down by 18.3% compared to the same month last year. South Korea did much better and its August production was only off 5.4% from August 2008, at 4.2 mt of crude steel last month.
(Both are major customers for Australian iron ore and coking coal.)
In the EU, Germany’s crude steel production was 3.0 mt in August 2009, down 26.0% from August 2008. Spain produced 1.1 mt in August 2009, down by 35% from the same month last year.
Turkey produced 2.3 mt of crude steel in August 2009, off 9.1% down from 2008.
The US produced 5.2 mt of crude steel in August 2009, down a still large 40% compared to the same month last year. Brazil produced 2.6 mt of crude steel in August 2009, 15.0% lower than August 2008.
Iran produced 900,000 tonnes in August, 15.2% more than in August 2008.
The Association said that in August, almost all the major steel-producing countries – including China, Japan, South Korea, Germany, the US and Brazil– have shown their highest monthly figures so far this year.
Total crude steel production in the 66 reporting countries for the first eight months of 2009 was 759.5 mt, down 18.1% over the same period of 2008.
The fall was double that rate earlier in the year at one stage.
In Australia production is still rising, although it remains down on 2008.
Production hit 511,000 tonnes in August, up from 380,000 tonnes in July (thanks to the Number 5 blast furnace of BlueScope Steel returning to work after a reline). It was still 26% lower than the 690,000 tonnes produced in August of last year.
That’s a lot better than the 45% fall in our crude steel output for the first half of the year compared with the first six months of 2008.
