Daily iron ore price update (steel slaughter)

The ferrous complex was crushed on October 28, 2021 as spot fell, paper fell more and steel is a plunging anvil:

The entire ferrous complex is now in an outright crash. Steel has fallen literally off the cliff and blasted through critical price support like it was not there:

In my view, steel prices are about to halve from the peaks and, if China does not stimulate in the next quarter, prices will keep on collapsing towards 2015-16 price range.

Needless to say, steel raw materials are in a spot of bother. Coking coal was limit down again last night (note the gapping):

Iron ore futures fell more modestly but, frankly, as steel pukes there is every reason to expect iron ore to follow directly:

Why? There is an unbelievable global glut of everything ferrous as Chinese construction tanks. World Steel:

World crude steel production for the 64 countries reporting to the World Steel Association (worldsteel) was 144.4 million tonnes (Mt) in September 2021, an 8.9% decrease compared to September 2020.

Crude steel production by region

Africa produced 1.4 Mt in September 2021, up 51.0% on September 2020. Asia and Oceania produced 101.9 Mt, down 14.6%. The CIS produced 8.2 Mt, down 1.0%. The EU (27) produced 12.7 Mt, up 15.6%. Europe, Other produced 4.2 Mt, up 4.3%. The Middle East produced 2.2 Mt, down 35.7%. North America produced 9.8 Mt, up 19.2%. South America produced 3.9 Mt, up 17.0%.

Table 1. Crude steel production by region
Sep 2021 (Mt) % change Sep 21/20 Jan-Sep 2021 (Mt) % change Jan-Sep 21/20
Africa 1.4 51.0 11.9 31.2
Asia and Oceania 101.9 -14.6 1,066.0 5.5
CIS 8.2 -1.0 78.9 6.4
EU (27) 12.7 15.6 114.8 19.8
Europe, Other 4.2 4.3 37.9 13.4
Middle East 2.2 -35.7 28.9 -3.0
North America 9.8 19.2 88.6 19.2
South America 3.9 17.0 34.1 23.9
Total 64 countries 144.4 -8.9 1,461.2 7.8

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 73.8 Mt in September 2021, down 21.2% on September 2020. India produced 9.5 Mt, up 7.2%. Japan produced 8.1 Mt, up 25.6%. The United States produced 7.3 Mt, up 22.0%. Russia is estimated to have produced 5.9 Mt, down 2.2%. South Korea produced 5.5 Mt, down 5.0%. Germany produced 3.3 Mt, up 10.7%. Turkey produced 3.3 Mt, up 2.4%. Brazil produced 3.1 Mt, up 15.3%. Iran is estimated to have produced 1.3 Mt, down 51.4%.

Table 2. Top 10 steel-producing countries
Sep 2021 (Mt) % change Sep 21/20 Jan-Sep 2021 (Mt) % change Jan-Sep 21/20
China 73.8 -21.2 805.9 2.0
India 9.5 7.2 87.3 23.3
Japan 8.1 25.6 72.1 17.9
United States 7.3 22.0 64.4 19.8
Russia 5.9 e -2.2 56.4 6.2
South Korea 5.5 -5.0 52.9 6.7
Germany 3.3 10.7 29.9 16.1
Turkey 3.3 2.4 29.9 15.0
Brazil 3.1 15.3 27.2 20.2
Iran 1.3 e -51.4 19.3 -8.6

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

China is about to drop a steel deflation bomb on the planet.

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