Overnight iron ore prices were volatile. 12 moth swaps fell $1.43 to $117.13. Spot was flat. Rebar fell another 6 points to 3490 and is clearly weakening seasonally. This is worth watching because of it falls too much further the squeezed profitability of steel mills could trigger an iron ore inventory rundown. Rebar futures were flat. Chinese Pport stocks rocketed last week, up 2 million tonnes to the 79.6 million tonnes, the highest level this year, but still only 5 million tonnes off the bottom and probably the result of the holiday.
From World Steel over night:
Brussels, 21 October 2013 – World crude steel production for the 65 countries reporting to the World Steel Association (worldsteel) was 133 million tonnes (Mt) in September 2013, an increase of 6.1% compared to September 2012.
World crude steel production for the 65 reporting countries was 1,186 Mt in the first nine months of 2013, an increase of 2.7% compared to the same months of 2012. Asia produced 795.1 Mt of crude steel in the first three quarters of 2013, an increase of 5.9% compared to the same period of 2012. The EU produced 123.8 Mt of crude steel in the first nine months of 2013, down by -4.2% on the same months of 2012. North America’s crude steel production in the first three quarters of 2013 was 88.9 Mt, a decrease of -4.1% compared to the same period of 2012. The C.I.S produced 81.5 Mt of crude steel in the first nine months of 2013, down by -3.4% on the same months of 2012. South America produced 34.8 Mt of crude steel production in the first three quarters of 2013, down by -1.2% compared to the same period of 2012.
China’s crude steel production for September 2013 was 65.4 Mt, up by 11.0% compared to September 2012. Elsewhere in Asia, Japan produced 9.3Mt of crude steel in September 2013, an increase of 5.5% over September 2012. South Korea’s crude steel production was 5.2 Mt in September 2013, down by -8.7% on September 2012.
In the EU, Germany produced 3.6 Mt of crude steel in September 2013, an increase of 1.4% compared to September 2012. Italy produced 2.1 Mt of crude steel, -10.4% less compared to September 2012. France’s crude steel production was 1.4 Mt, up by 7.4% on September 2012. Spain’s production was 1.3 Mt, an increase of 5.9% on 2012 September.
Turkey’s crude steel production for September 2013 was 3.0 Mt, down by -1.2% on September 2012.
The US produced 7.2 Mt of crude steel in September 2013, up by 6.3% compared to September 2012.
The crude steel capacity utilisation ratio for the 65 countries in September 2013 was 79.3% and it is 2.1 percentage points higher compared to September 2012. It is 3.4 percentage points higher than August 2013.
Capacity utilisation is materially above the same moth last year and it’s all about China’s 11% growth. So much for peak steel, at least for this year!
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.
