International Steel Mills

Global Steel Production Rose 1.4% - China at 48.5% of Total

November 19, 2013

According to the World Steel Association, global steel production rose 1.4 percent in October to 134,262,000 tonnes compared to September and reached a capacity utilization rate of 78.0 percent. The annualized three month moving average production was 1.591 billion tonnes through October (Figure 1).

Capacity is now 2.076 billion tonnes. Global production this year has deviated from the pattern of the last three years by exhibiting a fourth quarter uptick. In three months through October, global production grew by 6.2 percent year-over-year and year-to-date production was up by 3.4 percent compared to the first ten months of 2012. Global steel production growth is accelerating.

All regions except “Other Europe” and the CIS had positive growth in three months through October year-over-year. China grew 11.3 percent on the same basis, also with accelerating growth. In the month of October, North America and China produced 7.6 percent and 48.5 percent of the global total respectively (Table 1).

SMU Comment: Reports of a global economic slowdown are not being reflected in the steel production statistics. China’s growth of steel production continues to exceed their GDP growth and reported plant closures are evidently being overwhelmed by start-ups. Sooner or later this must end badly but, since almost half the steel industry is state owned, the realization period may still be long. (Source: World Steel Association)