World crude steel production for the 65 countries reporting to the World Steel Association (worldsteel) was 134 million tonnes (Mt) in September 2014, a slight decrease of -0.1% compared to September 2013.
China’s crude steel production for September 2014 was 67.5 Mt, the same compared to September 2013. Elsewhere in Asia, Japan produced 9.2 Mt of crude steel in September 2014, a decrease of -0.5% compared to September 2013. In September 2014, India produced 6.8 Mt of crude steel, an increase of 2.5% compared to the same month 2013. South Korea produced 5.7 Mt of crude steel in September 2014, up by 10.1% on September 2013.
In the EU, Germany produced 3.5 Mt of crude steel in September 2014, a decrease of -3.0% compared to September 2013. Italy produced 2.2 Mt of crude steel, up by 0.7% compared to September 2013. France’s crude steel production was 1.4 Mt, a decrease of -0.5% on September 2013. Spain produced 1.2 Mt of crude steel, down by -12.8% compared to September 2013.
Turkey’s crude steel production for September 2014 was 2.9 Mt, down by -3.1% on September 2013.
The US produced 7.3 Mt of crude steel in September 2014, a decrease of -0.1% compared to September 2013.
Brazil’s crude steel production for September 2014 was 2.9 Mt, down by -3.8% on September 2013.
The crude steel capacity utilisation ratio for the 65 countries in September 2014 was 76.1%. It is -2.6 percentage points lower than September 2013. Compared to August 2014, it is 1.9 percentage points higher.
The cumulative annual figure is still up 2.1% so that’s something but it’s clearly decelerating. I expect we’ll be at peak steel this time next year for many years.
Meanwhile, Chinese over-capacity is flooding world markets, from the FT:
Chinese exports of steel were a record 8.52m tonnes last month, an increase of 73 per cent from a year earlier, according to customs data.
…“The US steel industry is facing a very sizeable increase in imports from around the world,” Kevin Dempsey, senior vice-president of the American Iron and Steel Institute, says. “We’re seeing some signs of improvement in the US economy and it seems that all of the growth in steel is being taken from imports, including that from China.”
…The surge in Chinese imports led to the launch earlier this year of a number of US anti-dumping investigations which are expected to climax next month and lead to the imposition of punitive tariffs.
…That may be a bitter pill to swallow for China’s local governments. Steel mills are required to maintain production because local governments need to keep cash circulating amid heavy debt loads, according to Anne Stevenson-Yang, co-founder of Beijing-based J Capital Research.
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This will be the story of 2015, the push back against Chinese dumping. It will accelerate the Chinese adjustment and cause iron ore and steel market price ruptures as firms go under.
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
