The aggregated crude steel output of 64 countries stood at 169.5 million tonnes (mn t) in Apr ’21, registering a surge of 23% against 137.4 mn t a year ago, on account of easing of Covid-19 restrictions and rising steel prices, as per data released by the World Steel Association.
Higher output by the 10 major steel-producing countries is driven by:-
- Opening up of economies with the increased pace of vaccinating citizens against Covid-19 across the globe.
- Higher investments by the government to boost economic recovery.
SteelMint analyses production of the top three steel producing nations:-
1. China’s crude steel output hits all-time high- Warding off the government’s efforts to reduce annual output and curb carbon emissions the Chinese steel mills produced 97.90 mn t in Apr ’21, hitting a new high.
The volumes were up by 13% year-on-year(y-o-y) against 86.33 in the corresponding period last year (CPLY).During the four months of 2021(Jan-Apr ’21) China’s output aggregated to 374.60 mn t, up 16% compared to 323.4 mn t in the same period last year.
The production volumes remained supported due to factors below:-
- Improved consumer demand- China’s industrial production grew by 9.8% in Apr ’21 against CPLY, as per the National Bureau of Statistics (NBS). It was driven by higher investments in fixed assets, factories and machinery which improved by 19.90% y-o-y, during the first four months of CY ’21.
- Higher profits- Higher realizations in the overseas market and increasing domestic market prices pushed mills towards higher production. For instance, average monthly export offers for HRC (SS400) stood at around $884/t FoB China, way up from $405/t FoB in Apr ’20 and $754/t FoB basis in Mar ’21.
2. India crude steel output rises 152% in Apr ’21- India, being the second-largest steel producing nation, produced 152% more on a y-o-y basis. The output stood at 8.30 mn t in Apr ’21 in comparison to with 3.29 mn t in Apr ’20.
Meanwhile, during the first four months of CY ’21(Jan-Apr) the output moved up 27% to 30.10 mn t against mn t in CPLY.
- Increased exports- The increased demand in the overseas market during Apr ’21, fuelled by higher government investment to boost economic recovery, drove the mills towards higher production since H2 CY ’21. In Apr ’21, Indian finished steel export shipments witnessed a significant increase of 122% y-o-y to 0.95 mn t, as per the Joint Plant Committee’s(JPC’s) provisional report.
- Higher capacity utilization rates- Subdued demand and stringent lockdown in Mar-Apr ’20 had reduced operating rates of mills to 25% which kept the production volumes low. At present the Indian steel producers are running at around 90-93% of their rated capacity.
3. Japan’s crude steel output rises 18.9% in Apr ’21- Japan’s crude steel output stood at 7.80 mn t in Apr ’21 compared to 6.56 mn t a year ago, increasing by 19% on a y-o-y basis.
On the other hand, during the first four months of 2021(Jan-Apr) the output stood at 31.50 mn t, up 3% against 30.67 mn t in CPLY.
Outlook-
It is expected that the upward momentum in production shall continue in the near term due to the resumption of activities across global economies as concerns owing to Covid-19 continue to ease.
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