World crude steel production fell by 1.4% y-o-y to 156.80 million tonnes (mn t) in Aug’21 as against 159 mn t in Aug’20, as per latest WSA data. On a monthly basis, global crude steel output fell 3% against 161.70 mn t in July.
Meanwhile, in the Jan-Aug’21 period, accumulative output stood at 1,321.9 mn t, up 10.6% y-o-y.
Top three steel producing nations
1. China’s crude steel down a considerable 13.2%: The leading steel producing country, China, churned out 83.20 mn t of crude steel this August, marking a 13.2% decline against CPLY.
With the increase of 11.8% y-o-y in Jan-Jun’21 at 563.30 mn t, the government turned strict and took more stringent approaches leading to a decline in production in the following months.
- Restrictions have been increased in provinces of Shandong, Shanxi and Hebei along with many more provinces to restrict output volumes to CY’20 levels.
- Also, mills in the steel hub of Tangshan are required to cut about 30% of their output during Jul-Dec’21 except for mills classified as Grade A (meeting emission standards). This is to maintain clearer skies for the Winter Olympics and Paralympics to be held in Feb-Mar’22.
- Removal of export rebates in mid-May’21 was also among the restraints put by the government. Also, the continued air of uncertainty around an export tax levy kept exports low helping to restrict production volumes.
On the other hand, in Jan-Aug, total production stood at 1,321.90 mn t, an increase of 10.6% on a y-o-y basis.
2. India’s crude steel production up 8.2%: India, the second-largest steel producing nation, produced 9.90 mn t of crude steel in Aug’21, up 8.2% compared to 9.15 mn t in Aug’20.
Steel mills ramped up their capacity utilisation rates. Steel major JSW reported capacity utilisation at 92% in Aug’21, against 88% in Aug’20, as per a press release.
Higher export opportunities amid healthy overseas demand led to a surge in export volumes in Aug’21 to 1.42 mn t, up 31% y-o-y against 1.08 mn t in Aug’20. Furthermore, Indian mills are driving forward with addition of new capacities which are likely to push the production volumes higher in upcoming months.
3. Japan’s crude steel production rises 22.9% y-o-y: Japanese mills produced 22.9% more of crude steel at 7.9 mn t in Aug’21 in comparison to 6.43 mn t in CPLY. Also, in Jan-Aug’21, production rose by 17% y-o-y to 64 mn t compared to 54.70 mn t in Jan-Aug’20.
The production volumes rose as the economy gradually recovered from the Covid slump. Also, robust downstream demand within and outside the country compelled Japanese mills to produce more.
Further, Japan’s finished steel exports moved up by 30% to 2.23 mn t in July in contrast to 1.71 mn t in the same period last year.
Outlook
On one hand, the steel giant, China, is cutting its steel-making capacities, while, on the other, there is an increase in investments in setting up new plants in other countries. Thus, it remains a valid question as to what the momentum would be in the upcoming months.
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