World Crude Steel Production Slumps by 13% in April

World Crude Steel Production Slumps by 13% in April

World crude steel production is estimated to have fallen by 13.0 percent, year-on-year, to 131.1 million tonnes in April, according to a recent release by the World Steel Association (worldsteel). The figure includes the output of the 64 countries that report to worldsteel – covering approximately 99 percent of global crude steel production.

The Covid-19 pandemic and associated lockdown measures have significantly affected production volumes by many steelmakers worldwide, along with the collection of output statistics. The Brussels-based association notes that “many of this month’s figures are estimates that may be revised with next month’s production update”.

Crude steel output in the EU 28, inclusive of the UK, is estimated at 10.7 million tonnes in April – down 22.9 percent, year-on-year. The largest reductions in volumes are indicated in Spain and Italy. Although supply is being cut in southern Europe, steel prices are in decline.

Despite the difficulties posed by the coronavirus crisis, worldsteel was able to ascertain April figures for several of the world’s largest steel-producing countries. Substantial reductions were recorded in most of these nations, with the exception of China.

Chinese reported crude steel output was 85.0 million tonnes last month – broadly unchanged from the April 2019 outturn. Throughout the virus outbreak, many blast furnaces in China maintained relatively strong operating rates. This initially sent steel market inventories soaring to record highs. As demand in the country started to recover, stock levels have fallen to more manageable volumes.

Production plummets in the rest of the world

Severe lockdown restrictions have stripped, at least temporarily, India of its position as the world’s second largest steel-producing nation. Output was slashed by an unprecedented 65.2 percent, year-on-year, in April. Last month’s production figure was just 3.1 million tonnes. Government decrees resulted in the cessation of a substantial proportion of the country’s steel industry.

Steel consumption in Japan was already weakening, prior to the outbreak of the virus. As Covid-19 spread, domestic mills were forced to undertake additional production cuts in a bid to rebalance supply with demand. worldsteel states that Japan’s output was 6.6 million tonnes in April – down 23.5 percent compared with the year earlier figure.

Steelmakers in the United States manufactured less than 5.0 million tonnes of crude steel in April. This is a reduction of 32.5 percent, year-on-year. Data from the American Iron and Steel Institute (AISI) suggests that capacity utilisation by the domestic mills was just 55 percent last month. Provisional AISI statistics indicate that mill operating rates were even lower in May, approaching 50 percent.

In Turkey, steelmaking fell below 2.5 million tonnes last month – a 26.3 percent decrease compared with the April 2019 figure. The country’s exports are in the spotlight, with the European Commission recently launching an antidumping investigation against Turkish origin hot rolled flat products. Mills in Turkey are calling for retaliatory measures to be placed upon their European counterparts.

Although lockdown restrictions are slowly being eased around the world, output figures for many countries in May are expected to show similarly dramatic year-on-year reductions as those recorded in April. MEPS forecasts a gradual recovery in crude steel production in the second half of 2020.

Source: MEPS International Ltd.

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