Steel News

Steel Statistics in the News

Contents:-
Global Steel Production  :  Consolidation  :  China Watch  :  EU Watch  :  US Watch  :
CIS Watch  :  Global Scrap Trade  :  Global Iron Ore Trade


Global Steel Production  

Global Crude Steel Production over January-May 2009 down 22% on the same 2008 period.  Chinese production marginally up to take 48% global share.  World output in May at 95.6 million tonnes was highest since October 2008.

Global crude steel production for the 62 countries reporting to the World Steel Association broke the 100 million tonnes per month level for the first time in March 2006 on the way to recording a total for 2006 of 1,251 million tonnes up 9.1% on 2005.  2007 saw monthly production top 114 million tonnes on the way to a total of 1,351 million tonnes, up 8% on 2006.  

The 2007 total represents a 5 year increase of 49%, a rise since 2000 of 59% and an increase since 1998 of an astonishing 73%.  

May 2008 saw global output reach 121 million tonnes before falling every month thereafter to be 30% down at 84 million tonnes by December, the lowest since January 2004.  Full year 2008 saw global output was down 1.8% on 2007 at 1,327 million tonnes.

Chinese production fell from a peak of 47 million tonnes in June to 35 million tonnes in November before rallying to 39 million tonnes in December to complete 2008 at 500 million tonnes, up 1.1% on 2007.  China accounted for 38% of global production in 2008, up from 36% in 2007.  Excluding China global output in 2008 fell 3.5%.

January-May 2009 saw global output 22% below the same period 2008.   Chinese production was marginally up to account for 48% of the global total, with global production excluding China down 36%. 

All major producing regions showed falls, EU27 down 44%, Non-EU Europe 22%, CIS 33%, NAFTA 49%, South America 36% (Africa 23%, Middle East unchanged and Oceania 49%).  The combined output of the Asian majors exluding China was down 28%. 

April saw global output reach 95.6 million tonnes, its highest since October, and with China's contribution at 46.5 million tonnes its highest since June 2008. 

In the below we summarise annual World Steel Association crude steel production data.   

 

   
 

Stainless steel production grew 17% to 28.4 million tonnes in 2006,  led by Asian growth of 21% to 15.1 million tonnes or 53% of the global total.  Chinese stainless production grew 68% to 5.3 million tonnes in 2006.

In 2007 global output fell 2% to 27.8 million tonnes despite 6% Asian growth to 16 million tonnes and 58% of the total.

2008 saw global output fall 6% to 25.9 million tonnes with production in the second half of the year at 11.1 million tonnes 33% down on the January-June level.   


Consolidation

The US$ 38.3 billion Arcelor-Mittal merger formed a global giant accounting for approximately 118 million tonnes or 9.5% of world production in 2006.  Mittal paid about 4.5 times the ebitda of Arcelor in 2006.  More significantly it made them the largest producer in all major markets except Asia. 

The second largest steel industry merger to date saw the creation of then fifth biggest steel producer.  Tata Steel acquired Corus for £6.2 billion (US$ 12 billion), paying 9 times Corus ebitda.  Tata paid 33% more than their opening offer in order to outbid CSN leading to concerns that they overpaid for the Anglo-Dutch steelmaker.

There are conflicting views on the likely level of merger activity in 2009.  Some forecast subdued activity due to depressed demand for steel with uncertainty over when that will recover, others take the view that depressed market values give those with the resources to do so a great opportunity to buy.

The biggest merger story at the start of 2009 is of a possible Russian mega-merger involving the Russian state, nickel miner Norilsk and several steel producers including Metalloinvest, Evraz and Mechel.  The impetus for the deal comes from the need for such companies to refinance their debts.

Indian steel companies other than Tata have also expanded internationally in recent times as seen by the April 2007 acquisition of Algoma Steel by Essar.  Essar (2.8 million tonnes per year) agreed to pay US$ 1.6 billion for Algoma of Canada (2.3 million tonnes per year).

Also in Canada with Sweden's SSAB bought 3.4 million tonnes per year Ipsco for US$ 7.7 billion, to create a 7 million tonnes per year producer.  Early 2008 saw the disposal of Ipsco tube mills by SSAB to Evraz for US$ 4 billion with Evraz on-selling part of the purchased company to Russian tube-maker TMK for US$ 1.2 billion.  Stelco, a 3.7 million tonnes per year producer became US Steel Canada in a US$ 1.9 billion deal completed in October 2007, leaving Canada without a significant domestically owned producer.  The merged group has around 25 million tonnes annual capacity, slightly ahead of the combined Tata-Corus total. 

2008 saw Russia's Severstal buy heavily in the US with the purchase of Sparrows Point from Arcelor-Mittal, as well as WCI Steel and Esmark (which includes Wheeling-Pittsburgh Steel).  Also in the US in 2008, Gerdau-Ameristeel has completed its US$ 4.2 billion purchase of Chaparral Steel. 

Despite recent activity the steel industry remains much more fragmented than its suppliers (particularly iron ore), its largest customers (such as automotive) and its rivals (for example Aluminium).  Further take-overs, mergers and alliances are inevitable as producers look to integrate horizontally with other mills and vertically with raw material suppliers and steel distributors to secure their futures. 

As the global economy faces a downturn and with the steel sector share prices depressed it remains to be seen whether this speeds or slows the pace of consolidation.  

2008 has seen further developments in China.  Tangshan and Hangang joined in June to form Hebei Iron and steel Group, with a combined 2007 crude steel production of 31 million tonnes, moving it ahead of Baosteel to become the largest Chinese mill.  However Baosteel will take 80% of Guangdong Iron and Steel Group formed of Baosteel, Shaoguan and Guangzhou groups.

Although there is no timetable in place the combined group had 2007 output of 36.5 million tonnes moving it back to the biggest Chinese producer and second in the world.  The long awaited Wuhan and Liuzhou tie up was signed in September 2008 with the formation of Guangxi Iron and Steel with current capacity of 30 million tonnes per year rising to 40 million tonnes with completion of proposed new plant.


China Watch

Chinese 2006 crude steel production was 423 million tonnes, more than in 2003 and 2004 combined and 19% up on 2005.  2007 production was 495 million tonnes up a further 17%, accounting for 36% of global output.  2008 production peaked at 47 million tonnes in June but fell back thereafter to just 35 million tonnes in November before rallying to 37 million tonnes in December, when it accounted for 46% of global output.  Full 2008 production of 500 million tonnes was up 1.1% on 2007 and accounted for 38% of global output.

January-May 2009 saw Chinese output of 217 million tonnes, marginally up on the same 2008 period and accounting for an astonishing 48% of global production.  May 2009 crude steel production of 46.5 million tonnes was second only to June 2008.   

2008 full year exports of 56.2 million tonnes were down 14% by quantity, but maintained China as the world's biggest steel exporter, while up 37% by value.  Full year imports of 15.4 million tonnes fell 9% by quantity while their value rose 12%.  China registered a trade surplus in steel mill products of 40.8 million tonnes (-16%) (US$ 36 billion (+60%)).

   

January-May 2009 saw China exports just 6.8 million tonnes, 66% below same 2008 period, dropping China below Japan, EU27, Russia, Ukraine, Turkey and South Korea to seventh largest steel exporter over this period.  With exports falling and imports up 25% year on year China moved into monthly trade deficits in steel mill products (long and flat products, semis and tubes) over February-May 2009 for the first time since autumn 2005.

Over January-May 2009 China recorded a trade deficit of 1.9 million tonnes, compared to a trade surplus of 13.1 million tonnes in the same period last year, a shift of over 15 million tonnes away from exporting. 

China also imported record levels of steelmaking raw materials over January-May 2009.

Iron Ore imports totalled 242 million tonnes, up 26% on the same 2008 period
while five months 2009 scrap imports of 6.3 million tonnes were up over 400% on the same 2008 period.  

International pressure over recent years saw the Chinese Government act to curb steel exports resulting in a series of export rebate cuts and export tax increases.

However falling world demand and falling Chinese exports have seen the Chinese authorities reverse direction. 

April 2009 saw China increase export rebates to 13% on a range of higher value products.  These were mostly flat products, cold rolled and coated sheets, and stainless.

Amongst long products some higher grade bars and flats also benefitted.  June 2009 saw further products receive an export rebate of 9%, including hot rolled coil, hot rolled plate and heavy sections.


EU Watch

External EU27 trade saw imports jump 23% in 2007 to 48.7 million tonnes whilst exports remained steady at 32.2 million tonnes.  A quantity deficit of 7.3 million tonnes in 2006 rose to 16.5 million tonnes in 2007, whilst a value surplus of €8.3 billion in 2006 was cut to €2.4 billion in 2007. 

Imports in 2008 at 39.7 million tonnes were down 18% on 2007 while exports at 34 million tonnes were up 6%.  The EU's external trade deficit for 2008 was 5.8 million tonnes, down 65% or 10.7 million tonnes on 2007.  The EU27 recorded a value surplus of €6.65 billion in 2008. 

 

January-March 2009 saw EU27 exports to third countries at 6.7 million tonnes down 21% on the same 2008 period.  Exports had fallen to just 1.7 million tonnes in January but recovered to 2.2 million tonnes in February and 2.8 million tonnes in March.

Despite EU exports falling, with other major steel exporters fairing worse in the economic slowdown, the EU27 became the largest steel exporter over the first quarter of this year.

Meanwhile imports for outside the EU27 over the first quarter of the year at 6.3 million tonnes were down 36%. 

 

 

EU27 crude steel production rose 1.7% in 2007 to 210 million tonnes.  The EU share of total global production slipped from 16.5% to 15.7%, as global production rose 7.5%.  However the global figures are slewed by those of China.  With China excluded global production rose 3.3% with the EU27 maintaining production share. 

2008 saw EU27 production 5.3% down on 2007 at 199 million tonnes with the EU27 share of global output falling from 16% to 15%.  2008 production peaked in May at 19 million tonnes, but fell back thereafter.  January-May 2009 saw EU27 mills produce just 50.7 million tonnes, 44% below the corresponding 2008 level. 


US Watch

US mills produced 98.5 million tonnes in 2006, up 6% on 2005.  Production in 2007 was down 1.4% on 2006 at 97.2 million tonnes.  2008 saw production of 91.5 million tonnes, down 6.8% on 2007.  2008 production peaked in May at 9.1 million tonnes but fell thereafter to just 4.1 million tonnes in December, 52% below the level of December 2007.  January-May 2009 saw US crude steel production of just 20.1 million tonnes, 53% below the same period 2008. 
 
The US trade deficit in steel for 2006 was 31.4 million tonnes (US$ 19.7 billion).  In 2007 exports rose 14% to 9 million tonnes, while imports fell 27% to 40.4 million tonnes.  The resultant 2007 deficit was 19.2 million tonnes (-39%) (US$ 15.3 billion (-22%)). 

January-December 2008 saw US imports down 4% to 28.4 million tonnes while exports rose 23% to 12.6 million tonnes resulting in a deficit of 15.8 million tonnes (-18%) (US$ 18.6 billion (+21%)).

The US$ 825 billion stimulus package for the US economy will include a controversial "Buy America" steel provision for all public works funded by project.  Despite just being approved this has already provoked concern in Canada, the EU and China, amongst others, as the US shows signs of a return to protectionism.

US imports over January-April 2009 at 6 million tonnes were down 37% on same 2008 period with April imports of under 1.1 million tonnes being the lowest since April 1993.  Imports from NAFTA neighbours fell 56%, whilst those from other sources fell 26%.  January-April 2009 exports at 2.5 million tonnes were down 35% on the corresponding 2008 level, with shipments to Canada down 40%. 

 

   


CIS Watch

The Russian trade surplus in steel for 2006 was 25.4 million tonnes (US$ 10.2 billion).  This huge surplus was despite an increase in imports of 28% by quantity and 56% by value year-on-year.  2007 saw export levels down 6% and import levels up 27%, reducing Russia's trade surplus by 13% to 22.1 million tonnes (US$ 10.1 billion) as domestic demand soared.

2008 saw exports over January-June of 15.6 million tonnes fall away 20% to 12.5 million tonnes over July-December giving full year exports of 28.2 million tonnes, down 3% on 2007.  Imports in 2008 totalled 5.4 million tonnes, down 23%, to give a full year 2008 trade surplus of 22.7 million tonnes (+3%) with a value of US$ 15.7 billion (+55%).

Russian 2007 crude steel production was up 2% to 72.2 million tonnes, having been up 5% at the half year. 

Russian 2008 crude steel production at 68.5 million tonnes was 5.4% down on 2007.  Production in 2008 peaked at 6.8 million tonnes in May and fell back thereafter to just 3.3 million tonnes in December, 46% below the December 2007 level. 

Crude steel output over January-May 2009 at 21.9 million tonnes was down 32% on the same period 2008.

Russian exports over January-April 2009 at 7.6 million tonnes were down 26% by volume and 49% by value on same 2008 period.  Export tonnage however fell less than those of other significant steel exporters and over Quarter 1 Russia was the third biggest exporter after the EU27 and Japan.  

 

The Ukrainian trade surplus in steel for 2006 was a massive 28.8 million tonnes (US$ 12.3 billion).  The Ukraine's exports equated to a remarkable 74% of crude steel production for this period.

In 2007 exports were down 1% to 29.9 million tonnes, while imports rose 44% to 2.1 million tonnes.  Despite a reduction in the quantity trade surplus of 3%, the value surplus rose 18% to US$ 15 billion.

2008 saw exports fall 5% to 28.4 million tonnes, with imports up 11% to 2.3 million tonnes giving a full year trade surplus of 26.1 million tonnes (-6%) (US$ 20.3 billion (+35%)).  Exports over July-December 2008 at 12.2 million tonnes were 25% lower than those over the first half of the year at 16.2 million tonnes.

The Ukraine registered a 5% increase in crude steel production in 2007 to 42.8 million tonnes.  2008 saw production fall 13% to 37.1 million tonnes with output strong to August but was sharply down thereafter. 

January-May 2009 crude steel production of 11.3 million tonnes was 39% below the corresponding 2008 level.  Ukrainian exports over January-May 2009 at 9.8 million tonnes were 27% down by volume and 57% down by value on the same 2008 period.

Over Quarter 1 2009 the Ukraine was the fourth largest steel exporter after the EU27, Japan and Russia and ahead of Turkey, China and South Korea. 

  


Global Scrap Trade

The total amount of scrap shipped internationally increased by 7% in 2008 to 73 million tonnes, with USA underlining its position as the biggest exporter and with Russian exports continuing to decline. 



 

Exports rose sharply in the first half of 2008, in part due to the iron ore price hike, but scrap prices and export tonnages fell away significantly towards the end of the year as the global economic crisis gathered pace.

 


Global Iron Ore Trade

By far and away the largest exporters of iron ore are Australia and Brazil.

Brazil moved fractionally ahead of Australia in 2007 with an 11% increase to 270 million tonnes, whilst Australian full year exports rose 8% to 269 million tonnes. 

Despite the exports of both countries falling back in Quarter 4 2008, the full year saw Australia increase exports 15% to 309 million tonnes with Brazil's full year exports up 5% to 282 million tonnes. 

Indian exports have grown fast reaching 90 million tonnes in 2005.  They dropped back by 4% in 2006 to 86 million tonnes.  We estimate Indian exports in 2007 at 91 million tonnes and in 2008 at 101 million tonnes.

South African exports rose 4% in 2008 to 32 million tonnes and Canadian exports rose 2% to 26 million tonnes.  Exports from Russia fell 22% to 25 million tonnes while those from the Ukraine rose 10% to 23 million tonnes.  

 

 

China imported 275 million tonnes in 2005, 326 million tonnes in 2006, 384 million tonnes in 2007 and 444 million tonnes in 2008, a 16% increase.  January-April 2009 saw China import record levels of Iron Ore, perhaps taking advantage of the lack of demand elsewhere. 

Meanwhile the recent announcement that BHPB and Rio Tinto plan to combine their iron ore  operations in Australia has been greeted with dismay by steelmakers with the power of the miners having led to sharp price rises in recent years : 71% in 2005, 19% in 2006, 9.5% in 2007 and 65%+ in 2008.  Price will fall in 2009 on the back of the global demand slump.  The Japanese, South Koreans and Taiwanese have settled at an average reduction of 33% with Arcelor-Mittal agreeing a similar package.  While Chinese mills are pushing for a 40% reduction, it is increasingly likely that they will fall into limne with the other majors. 

After exports from a number of major sources fell back in Quarter 1 2008 pending the annual price settlements, shipments jumped in Quarter 2 to smash previous records.  Quarter 3 exports were only slightly down on this level, while Quarter 4 shipments fell away around 20%.  Quarter 1 2009 has seen a recovery based on record Chinese purchasing. 

 

2007 Country Books now available

We are now publishing the International Steel series for 2007 for 30 countries plus the Summary Tables.  The books give detailed trade tables for the calendar year 2006 plus summary production information.  Also available electronically as an Excel spreadsheet.
Click on Publications to order.