Daily iron ore price update (world steel growth 2012)

Find below the iron ore complex price table for January 22, 2013:

And the chart:

Not much to report, clearly.

The big news overnight was the release of December world steel production figures and thus for the year as well:

World crude steel production reached 1,548 megatonnes (Mt) for the year 2012, up by 1.2% compared to 2011. This is a record for global crude steel production.

The growth came mainly from Asia and North America while crude steel production in the EU (27) and South America decreased in 2012 compared to 2011.

Annual production for Asia was 1,012.7 Mt of crude steel in 2012, an increase of 2.6% compared to 2011. The region’s share of world steel production increased slightly from 64.5% in 2011 to 65.4% in 2012. China’s crude steel production in 2012 reached 716.5 Mt, an increase of 3.1% on 2011. China’s share of world crude steel production increased from 45.4% in 2011 to 46.3% in 2012. Japan produced 107.2 Mt in 2012, a -0.3% decrease from 2011. In 2012, South Korea’s crude steel production was 69.3 Mt, a 1.2% increase compared to 2011.

The EU recorded a decrease of -4.7% compared to 2011, producing 169.4 Mt of crude steel in 2012. Germany produced 42.7 Mt of crude steel in 2012, a decrease of -3.7% on 2011. Italy produced 27.2 Mt in 2012, a -5.2% decrease over 2011. France’s crude steel production in 2012 was 15.6 Mt, a decrease of -1.1%. Spain produced 13.6 Mt of crude steel in 2012, a -12.1% decrease on 2011.

Annual production for Asia was 1,012.7 Mt of crude steel in 2012, an increase of 2.6% compared to 2011. The region’s share of world steel production increased slightly from 64.5% in 2011 to 65.4% in 2012. China’s crude steel production in 2012 reached 716.5 Mt, an increase of 3.1% on 2011. China’s share of world crude steel production increased from 45.4% in 2011 to 46.3% in 2012. Japan produced 107.2 Mt in 2012, a -0.3% decrease from 2011. In 2012, South Korea’s crude steel production was 69.3 Mt, a 1.2% increase compared to 2011.

The EU recorded a decrease of -4.7% compared to 2011, producing 169.4 Mt of crude steel in 2012. Germany produced 42.7 Mt of crude steel in 2012, a decrease of -3.7% on 2011. Italy produced 27.2 Mt in 2012, a -5.2% decrease over 2011. France’s crude steel production in 2012 was 15.6 Mt, a decrease of -1.1%. Spain produced 13.6 Mt of crude steel in 2012, a -12.1% decrease on 2011.

In 2012, crude steel production in North America was 121.9 Mt, an increase of 2.5% on 2011. The US produced 88.6 Mt of crude steel, 2.5% higher than 2011.

The CIS showed a decrease of -1.2% in 2012, producing 111.3 Mt of crude steel. Russia produced 68.9 Mt of crude steel, a 2.5% increase on 2011 and Ukraine recorded a decrease of -6.9% with a year-end figure of 32.9 Mt.

Table 1: Top 10 steel-producing countries

Rank	Country	2012 (Mt)	2011(Mt)	2012/2011(%)
1	China	716.5	694.8	3.1
2	Japan	107.2	107.6	-0.3
3	United States	88.6	86.4	2.5
4	India	76.7	73.6	4.3
5	Russia	70.6	68.9	2.5
6	South Korea	69.3	68.5	1.2
7	Germany	42.7	44.3	-3.7
8	Turkey	35.9	34.1	5.2
9	Brazil	34.7	35.2	-1.5
10	Ukraine	32.9	35.3	-6.9

In December 2012, world crude steel production for the 62 countries reporting to the World Steel Association (worldsteel) was 121.3 Mt, an increase of 2.4% compared to December 2011. The crude steel capacity utilisation ratio of the 62 countries in December 2012 declined to 73.2% compared to 76.1% in November 2012.The average capacity utilisation ratio in 2012 was 78.8% compared to 80.7% in 2011.

A few points. Clearly, China still drives the global steel market. Without its growth it would have been a very nasty year for global steel.

But of all of these pretty charts, it’s actually the last one that matters most. Despite 1.2% annual growth, capacity utilisation for December fell to a new year-on-year low. There is too much steel capacity which means limited pricing power and flows through to iron ore as price pressure as well.