Global steel output creeps up in May, down on year China production ticks up; Europe, N. America output down

Print this page Posted on : 06-23-2009 by recycleinme.com

''We're expecting output to increase now steadily towards the end of the year on the basis that the inventory drawdown is almost complete now.''

Reuters

London, June 22

Global crude steel production edged up in May from April largely thanks to output from China and India, although elsewhere it fell and stayed sharply down from last year, industry data showed.

Depleting inventories

World production in May fell 21 per cent on a yearly basis, despite rising from April and analysts said monthly gains could continue as inventories were close to depletion.

Crude steel output in May was 95.6 million tonnes, down from 121 million tonnes of May 2008, but up compared with 89 million tonnes in April, according to the World Steel Association.

''We're expecting output to increase now steadily towards the end of the year on the basis that the inventory drawdown is almost complete now,'' said Mr Peter Fish, managing director of industry consultants MEPS International.

Global steel production has tumbled this year, as demand in key steel consuming sectors such as construction and automotive shrank, forcing steelmakers to sharply reduce capacity usage and causing inventories to balloon.

Steady prices

But over the past month, prices in both long and flat steel products remained steady and even gained ground in certain regions, encouraging mills to boost some production from the current low capacity usage levels.

''We're a little bit of improvement in prices and people will be wanting to buy until prices increase further. There will be a little impetus for mills to get orders,'' he said.

Earlier this week, US steelmaker Nucor said it expected narrower second-quarter loss thanks to improved order entries in the recent weeks.

''We believe that destocking has largely run its course, and that service centers are beginning to increase their order activity,'' analysts at Dahlman Rose & Co. said in a research note, adding they expect the capacity utilisation to rise up to 60 per cent in the second half.

CHINA's up 0.4%

But for the first five months of the year output remained 22.4 per cent lower at 449.2 million tonnes compared with the same period last year, said the association, which represents around 85 per cent of the world's total steel producers.

But production in China posted a 0.4 per cent rise to 217 million tonnes in the first five months.

It is the biggest consumer and producer of the metal, accounting for nearly half of world production.

Output in Europe and North America remained low, with the former's production falling 44.4 per cent in the January-May period and the latter's down 49.3 per cent.

Production in the West Asia, where demand was buoyant last year due to booming infrastructure spending, edged down 0.3 per cent in May and was down 0.6 per cent in the first five months of the year.

Source : Business Line