Daily iron ore price update (global steel recession)

The ferrous complex flamed out on September 23, 2021 as spot iron ore firmed but paper markets fell overnight amid rises in just about everything else:

In news, global steel output is now falling at a good clip:

World crude steel production for the 64 countries reporting to the World Steel Association (worldsteel) was 156.8 million tonnes (Mt) in August 2021, a 1.4% decrease compared to August 2020.

Production (Mt)Growth (% y-on-y)Crude steel productionWorldROWChinaWorld (%)ROW (%)China (%)Mar-20Apr-20May-20Jun-20Jul-20Aug-20Sep-20Oct-20Nov-20Dec-20Jan-21Feb-21Mar-21April-21May-21Jun-21Jul-21Aug-21050100150200-50-2502550worldsteel.orgApr-20● ROW (%): -29.7%

Crude steel production by region

Africa produced 1.3 Mt in August 2021, up 38.2% on August 2020. Asia and Oceania produced 112.7 Mt, down 7.3%. The CIS produced 8.8 Mt, up 3.6%. The EU (27) produced 11.6 Mt, up 27.1%. Europe, Other produced 4.5 Mt, up 11.7%. The Middle East produced 3.6 Mt, up 10.9%. North America produced 10.2 Mt, up 24.4%. South America produced 4.0 Mt, up 17.2%.

Table 1. Crude steel production by region
Aug 2021 (Mt) % change Aug 21/20 Jan-Aug 2021 (Mt) % change Jan-Aug 21/20
Africa 1.3 38.2 10.6 30.3
Asia and Oceania 112.7 -7.3 966.3 8.5
CIS 8.8 3.6 70.9 7.7
EU (27) 11.6 27.1 102.1 20.5
Europe, Other 4.5 11.7 33.9 15.5
Middle East 3.6 10.9 29.0 10.1
North America 10.2 24.4 78.8 19.2
South America 4.0 17.2 30.3 24.9
Total 64 countries 156.8 -1.4 1,321.9 10.6

The 64 countries included in this table accounted for approximately 98% of total world crude steel production in 2020. Regions and countries covered by the table:

  • Africa: Egypt, Libya, South Africa
  • Asia and Oceania: Australia, China, India, Japan, New Zealand, Pakistan, South Korea, Taiwan (China), Vietnam
  • CIS: Belarus, Kazakhstan, Moldova, Russia, Ukraine, Uzbekistan
  • European Union (27)
  • Europe, Other: Bosnia-Herzegovina, Macedonia, Norway, Serbia, Turkey, United Kingdom
  • Middle East: Iran, Qatar, Saudi Arabia, United Arab Emirates
  • North America: Canada, Cuba, El Salvador, Guatemala, Mexico, United States
  • South America: Argentina, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay, Venezuela

Top 10 steel-producing countries

China produced 83.2 Mt in August 2021, down 13.2% on August 2020. India produced 9.9 Mt, up 8.2%. Japan produced 7.9 Mt, up 22.9%. The United States produced 7.5 Mt, up 26.8%. Russia is estimated to have produced 6.3 Mt, up 4.4%. South Korea is estimated to have produced 6.1 Mt, up 6.2%. Germany is estimated to have produced 3.0 Mt, up 6.7%. Turkey produced 3.5 Mt, up 7.1%. Brazil produced 3.1 Mt, up 14.1%. Iran is estimated to have produced 2.5 Mt, up 8.7%.

Table 2. Top 10 steel-producing countries
Aug 2021 (Mt) % change Aug 21/20 Jan-Aug 2021 (Mt) % change Jan-Aug 21/20
China 83.2 -13.2 733.0 5.3
India 9.9 8.2 77.7 25.6
Japan 7.9 22.9 64.0 17.0
United States 7.5 26.8 57.1 19.5
Russia 6.3 e 4.4 50.8 7.7
South Korea 6.1 e 6.2 47.5 8.4
Germany 3.0 e 6.7 26.7 17.4
Turkey 3.5 7.1 26.6 16.7
Brazil 3.1 14.1 24.1 20.9
Iran 2.5 e 8.7 20.4 9.7

e – estimated. Ranking of top 10 producing countries is based on year-to-date aggregate

Note that China is all that matters. These figures suggest that roughly 43mt less iron ore was needed from one year to the next in August. Of course, things have gotten worse much faster in the last quarter so ouput will register deeper falls as the base effect passes.

With rising supply that’s plenty of swing in the market balance to create the glut.

$60 ahead for iron ore. Global steel prices and coking are going to crash next.

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