Crude Steel Output Trudge Higher in October - Analyst Blog
26 Novembre 2013 - 10:00PM
Zacks
Global crude steel production rose
in October on the heels of gains across China, Japan and the U.S.,
according to a recent World Steel Association (“WSA”) report. The
international trade body for the iron and steel industry said that
crude steel output for 65 reporting nations rose 6.6% year over
year in October to 134 million tons (Mt). This compares favorably
with a 6.1% rise in September.
China, the world's largest steel producer, produced 65.1 Mt of
crude steel in the reported month, a 9.2% year over year rise. By
regions, steel output moved up across the European Union, Other
Europe, North America, Asia, Africa and the Middle East, while
falling in the C.I.S., South America and Oceania.
Growth was witnessed across major Asian producers. While China
logged a healthy gain, Japan (the second largest producer) racked
up a 7.7% increase in output to 9.5 Mt. Production crept up 1.6% to
6.8 Mt in India while rising 5.2% to 5.9 Mt in South Korea.
In North America, crude steel production went up 8.7% to 7.4 Mt in
the U.S., the third-largest steelmaker. Output in Canada fell 1.7%
to 1.1 Mt while increasing 1.7% to 1.6 Mt in Mexico.
In the Europe Union, output from Germany moved up 1.9% to 3.8 Mt
while climbing 17.9% to 1.1 Mt in the UK. Production fell 1.8% in
France and 10.1% in Italy to roughly 1.3 Mt and 2.2 Mt,
respectively. Spain and Turkey saw a 23.9% and 6.9% rise in output,
respectively. Overall output rose 4% in the European Union to 14.7
Mt.
Among other notable producers, output went down 2.8% and 1.5% in
Brazil and Russia, respectively, to roughly 3 Mt and 5.7 Mt,
respectively. Ukraine registered a 1.2% increase to 2.6 Mt.
The WSA noted that crude steel capacity utilization ratio for the
reporting countries rose to 77.5% in October from 75% a year ago.
The ratio, however, declined from 79.3% in Sep 2013.
Steel makers globally are grappling with weak prices due to soft
demand and overcapacity in the industry. Moreover, steel producers
have been hobbled by rising prices of key raw materials such as
iron ore and coking coal.
Last year, a sluggish construction market, oversupply in the
industry, challenging conditions in Europe and slowing growth in
emerging economies weighed on the performance of major steelmakers,
including ArcelorMittal (MT), U.S.
Steel (X), Nucor (NUE) and AK
Steel (AKS). Lower steel prices hurt margins of these
steel players.
According to the WSA, world crude steel production rose 1.2% year
over year to clock 1,548 Mt in 2012. Global steel demand is
expected to improve gradually this year and the next.
The WSA envisions global steel usage to increase 3.1% this year, an
improvement from a 2% rise in 2012. The optimism reflects a
recovery in demand driven by emerging economies. The demand
scenario looks brighter in 2014 as the industry body anticipates
steel usage to grow 3.3% factoring in higher contributions from the
developed economies.
Strength in the auto sector and a turnaround in non-residential
construction and housing markets are expected to aid to growth in
the U.S. Moreover, efforts of the Chinese government to rebalance
its economy will contribute to the domestic and global steel
demand. However, the Eurozone crisis remains as overhang on the
steel industry.
AK STEEL HLDG (AKS): Free Stock Analysis Report
ARCELOR MITTAL (MT): Free Stock Analysis Report
NUCOR CORP (NUE): Free Stock Analysis Report
UTD STATES STL (X): Free Stock Analysis Report
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