Overnight, the World Steel Association released it production figures for May and was more zombie growth:
World crude steel production for the 62 countries reporting to the World Steel Association (worldsteel) was 131 million tonnes (Mt) in May 2012, an increase of 0.7% compared to May 2011.
China’s crude steel production for May 2012 was 61.2 Mt, an increase of 2.5% compared to May 2011.
Elsewhere in Asia, Japan produced 9.2 Mt of crude steel in May 2012, up by 2.0% compared to the same month last year. South Korea’s crude steel production for May 2012 was 6.0 Mt, an increase of 2.0% compared to May 2011.
In the EU, Germany produced 3.7 Mt of crude steel in May 2012, a decrease of -9.7% on May 2011. Italy’s crude steel production for May 2012 was 2.6 Mt, down by -3.3% on May 2011. In May 2012, France produced 1.5 Mt of crude steel, up by 1.3% compared to May 2011. Spain’s crude steel production for May 2012 was 1.3 Mt, -13.9% lower than May 2011.
Turkey’s crude steel production for May 2012 was 3.1 Mt, an increase of 6.6% compared to May 2011.
The US produced 7.7 Mt of crude steel in May 2012, up by 7.4% on May 2011.
Brazil’s crude steel production for May 2012 was 2.9 Mt, -11.7% lower than May 2011.
The world crude steel capacity utilisation ratio for the 62 countries in May 2012 slid to 79.6% from 81.3% in April 2012. Compared to May 2011, it was 1.4 percentage points lower. During the past 18 months, the ratio was at its highest in April 2011 with 82.8% and the lowest ratio was in December 2011 with 70.7%.
This is crappy growth. The past four years have seen May Chinese growth rates of 10.5%, 0.6%, 20.7%, 7.8% and world growth of 5.8%. -21%, 29.1%, 4.2%. Also below find a chart of the IISI global steel production over the long term:
You can see the amazing period of growth we’ve just enjoyed, as well as the rounding off beginning at the top. In terms of more immediate concerns, the technicals look pretty good for iron at the moment with a nice base in place for prices, swaps and Chinese steel:
But unless Europe injects growth, the rally looks to have nowhere to go in a hurry.
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.
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