Worldsteel Association (WSA) reports that global crude steel production totaled 138.06 million tonnes (Mt) at a capacity utilization rate, (CUR) of 69.5% in December. Production was up by 1.51 Mt as the CUR was lower by 1.4 percentage points from November. On a year on year, (y/y) comparison, global crude steel production in December increased by 3.79 Mt as the CUR rose 1.3 percentage points.
On a three month moving average, (3MMA) basis the rate of annualized production rate through December was 1,677.7 Mt. WSA estimates that current global capacity stands at 2,384 Mt, thus, the annual excess global capacity at current operating rates is approximately 706 Mt. For the 12 months ending December total worldwide raw steel production totaled 1,688.1 Mt, up 86.49 Mt year to date y/y or 5.4%.
Figure 1 charts global steel production on the right-hand Y axis and percent CUR on the left-hand Y axis. Both capacity utilization and crude steel production trended higher for most of the year until September, at which point both metrics reversed direction.
Figure 2 shows a pie chart of raw steel production by region YTD, through December 2017. China with 845,033 Mt YTD, +4.8% y/y accounts more than half, (50.1%) of global raw steel production. The next biggest slice was “other Asia” with 290,720 Mt, +6.9%, accounting for 18.9% of the global total. Countries in “other Asia” include: India, Japan, South Korea, Pakistan, Taiwan, Thailand and Vietnam. Adding China + other Asia, accounts for 69.0% of global steel output.
Europe was the next largest producing region YTD with 209,398 Mt, +4.4% y/y and accounting for 12.4% of the global total.
North America (which includes Canada, U.S. and Mexico as well as Cuba, El Salvador, Guatemala, Trinidad & Tobago), produced a combined 116,222 Mt, +5.1% y/y, accounting for 6.9% of global output.
The CIS countries (Byelorussia, Kazakhstan, Moldova, Russia, Ukraine and Uzbekistan) combined tonnage was 102,289 Mt YTD, -0.1% y/y, representing for 6.1% of the global total. South America accounted for 44,026 Mt, up 12.0%, accounted 2.6% of the global total. Africa’s tonnage YTD was 32,449, +12.5% y/y, it accounted 1.9% of the global total.
The Worldsteel Association’s January 24th press release stated: World crude steel production reached 1,691.2 million tonnes (Mt) for the year 2017, up by 5.3% compared to 2016. Crude steel production increased in all regions in 2017 except in the CIS, which has remained stable (subject to current estimates). This release did not offer a forecast. Worldsteel has historically issues its forecasts twice per year in April and October.
At Gerdau we keep a keen eye on Global crude steel production and capacity utilization because of its huge impact on global trade and its influence on domestic pricing.