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Steel Production Slows in 1st Half

Crude steel production was flat in June and down -1.9 percent in the first six months of 2016, the World Steel Association (worldsteel) reported in its most recent steel production update.

First-half production increased by 0.6 percent in the Commonwealth of Independent States (CIS) but declined by:

  • -0.6 percent in North America;
  • -1.0 percent in Asia;
  • -3.2 percent in the Middle East;
  • -6.1 percent in the European Union (EU); and
  • -13.8 percent in South America.

In June, production increased by 1.4 percent in Asia but declined by:

  • -0.6 percent in the CIS;
  • -1.2 percent in North America;
  • -3.0 percent in the Middle East;
  • -5.3 percent in the EU; and
  • -11.1 percent in South America.

China produced 69.5 million tonnes (Mt) of crude steel in June, 1.7 percent more than a year ago. But its first-half production was down by 1.1 percent.

“The economic environment facing the steel industry continues to be challenging with China’s slowdown impacting globally across a range of indicators contributing to volatility in financial markets, sluggish growth in global trade and low oil and other commodity prices,” worldsteel Economics Committee Chairman stated in a press release announcing the organization’s Short Range Outlook (2016-2017). “The global steel market is suffering from insufficient investment expenditure and continued weakness in the manufacturing sector.

Demand will contract in China in 2016 and 2017 but is projected to increase in all other markets next year, according to worldsteel’s projections. Worldsteel has proposed key principles for excess capacity and structural adjustment in the steel sector, including removing barriers to efficient mergers. The association’s members represent approximately 85 percent of the world’s steel production.

What is your steel market forecast? Click here to take our Scrap Market Outlook Survey.

Photo courtesy of worldsteel.

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