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Global Steel Output Continues to Drop

Steelmakers worldwide are cutting output in an apparent effort to avoid surplus inventories once steel demand recovers from the effects of inflation, tight money supplies, war, and other factors.

Raw steel production slipped to 147.3 million metric tons in October, down -3.0% from September but even with the October 2021 output. Data supplied by the World Steel Assn. further shows that year-to-date raw-steel tonnage for 64 nations stands at 1.55 billion metric tons, which is -3.90% less than last year’s January-October total tonnage.

The YTD total is on track with World Steel’s recent short-term outlook for steel demand, which foresees a 2022 contraction of -2.3% from last year – to 1.796 billion metric tons.

The monthly report by World Steel tracks the total of carbon steel produced in basic-oxygen or electric arc furnaces and cast into semi-finished forms like billets for bar and rod products; slabs for flat products; or blooms, for beam and pipe products. Specialty and stainless steel volumes are accounted for separately.

World Steel has identified inflation, the tightening money supply, supply shortages, war, and other factors for the decrease in demand – and steelmakers have been adjusting their output levels for much of the past 12 months in order to adapt to the worsening conditions. Excess steel coils, slabs, and billets that remain in inventories could prolong steelmakers’ readiness to profit once demand recovers.

In China, the nation with the largest domestic industry, steel output has been trailing downward since the middle of 2021. In October, Chinese raw-steel production totaled 79.8 million metric tons, a -9.0% drop from September, although the new figure represents an 11.0% improvement over the October 2021 result.

For the ten months of 2022, China’s raw-steel production total is 780.8 million metric tons, which is -2.2% less than last year’s comparable result.

Indian steel production during October increased to 10.5 million metric tons, up 5.7% from September and up 2.7% from October 2021. The 10-month production total for India’s steelmakers is 93.3 million metric tons, 6.1% more than the 2021 figure.

Japan is the world’s third-largest steel producer and October output there increased 2.7% from September but fell -10.6% from October 2021. The YTD result for Japan is 67.8 million metric tons, a decrease of -6.5% from the January-October 2021 total.

In the United States, October raw-steel production totaled 6.7 million metric tons (7.4 million short tons), a 1.5% increase over September but a drop of -8.9% compared to the October 2021 production total. For the current year to-date, the U.S. steel industry has produced 61.5 million metric tons (67.8 million short tons) of raw steel, which is -4.8% less than the comparable figure for 2021.

Russia’s industry had an estimated output of 5.8 million metric tons during October, down -11.5% year over year.

Filling out the top-10 steelmaking countries’ October results, South Korea, Germany, and Turkey (numbers 6-8) each reported double-digit year-over-year decreases, while Brazil (9) posted a -4.5% decrease and Iran (10) logged a 3.5% rise over last October’s tonnage.