Global crude steel production expanded at solid pace in October on the back of a surge in output in China – the world’s biggest steel maker – according to a World Steel Association (“WSA”) report. Higher output across India, the United States and Europe also supported the production growth.
According to the international trade body for the iron and steel industry, crude steel production for 66 reporting nations went up 5.9% year over year for the reported month to 145.3 million tons (Mt). This follows a 5.6% gain last month.
By regions, October production data shows gains across all areas barring Oceania where output declined 3.1%.
China Steel Mills Roar, but Winter Cuts to Tighten Output
Output from China, which accounts for around half of the global production, shot up 6.1% year over year to 72.4 Mt in October as steel mills in the country continued to take advantage of a spike in steel prices that translates to higher profits for the industry. This follows a 5.3% rise to 71.8 Mt in September.
Nevertheless, Chinese steel output is expected to decline moving ahead as Beijing has started implementing a four-month reduction in production to streamline its burgeoning steel sector and control pollution during the winter months (lasting until the middle of March 2018). The Hebei province – China’s top steel producing region –is looking to shutter 50% of its steel capacity during winter in a bid to clean up the environment.
Overall, China is expected to cut its steel production capacity by around 50 million metric tons in 2017. The country’s actions to reduce its excess steel supply during winter are also expected to lend support to global steel prices moving ahead. This is also expected to tighten global steel output in the coming months.
China’s finished steel exports also slumped around 35% year over year to 4.98 million tons in October, per data released by the General Administration of Customs. The country’s steel exports are also down roughly 30% for the first ten months of 2017. Positive rulings in trade cases (resulting in levy of heavy tariffs) against China is contributing to a decline in Chinese steel exports.
