Wednesday, September 23, 2009

World steel production rises

       Global crude steel production rose to its highest level in almost a year in August, figures from the World Steel Association showed on Monday, as steel mills restarted idled capacity due to increased orders.
       The $500 billion industry is slowly recovering from one of the worst downturns ever and analysts expect output to rise further in the coming months, although the market is divided over whether the capacity start up is too rapid.
       Crude steel production was 106.5 million tonnes in August, after rising steadily since April and up from 103.9 million tonnes in July, despite a 5.5% drop compared with August 2008.
       "History tells you that demand tends to pick up faster than supply into an upturn," said analyst Jim Lennon at Macquarie Bank, referring to the highest monthly output since September 2008,when production totalled 107.9 million tonnes.
       Output in China, the world's biggest producer and consumer of the metal,rose to 52.3 million tonnes in August,up 22% year-on-year and the highest ever monthly figure.
       "The concern in the steel industry is that there is still overcapacity in the system and therefore there is a potential to oversupply the market.... I don't think there's any evidence of the steel mills increasing supply too fast at the moment," Lennon said.
       But last week Mel Wilde, chairman of UK-based International Steel Trade Association (ISTA), said producers were "overfeeding the market" even though demand remained weak.
       ArcelorMittal, the world's top steelmaker, does not agree. Chairman and chief executive Lakshmi Mittal, said last week he did not believe capacity restarts were taking place too soon.
       In August, almost all the major steelproducing countries, including China,Japan, Germany, the US, Brazil and Russia reached their highest monthly output this year.
       But for the first eight months of the year output remained 18.1% lower at 759.5 million tonnes compared with the same period last year.
       Output in Europe and North America dropped by 32.1 and 38.7% year-onyear respectively in August. In the European Union output dropped compared with July, as Italy's production almost halved.
       Production in the Middle East, where demand was buoyant last year due to booming infrastructure spending, rose by 14.9% in August compared with same month last year.

No comments:

Post a Comment