Global production seen to increase 10% in 2010 JEDDAH - Steel production in most major steel-producing nations fell last year, with few exceptions. As shipments continue to decline, the steel industry is expected to face another challenging quarter. Steel production in the Middle East rose 3.5 percent in 2009, while year-on-year global production fell by eight percent to 1,220 million metric tons (mmt), according to figures from the World Steel Association (WSA) released this week. WSA represents approximately 180 steel producers and oversees around 85 percent of the world's steel production. The latest figures show that 16.591mmt of steel was produced in the Middle East last year, compared to 16.036mmt in 2008. The main producers were Iran, Qatar and Saudi Arabia. However, production growth among the three countries differed widely. Iran saw its production rise 9.1 percent to 10.873mmt, Saudi production rose 0.5 percent to 4.69mmt, while Qatar saw its production plummet 26.9 percent down to 1.028mmt. Overall, global production fell 8.1 percent to 1.19 trillion metric tons. Europe saw the biggest change, falling 29.7 percent. North America was down 33.9 percent, South America by 20.1 percent and Africa by 11.3. Joining the Middle East in increasing production was Asia, which saw production up 3.8 percent. There were also some large fluctuations within individual countries. The biggest drops were by Belgium (-47.2 percent), Bulgaria (-45.4 percent), Romania (-46.4 percent), Croatia (-51 percent) and Moldova (-57.1 percent). The biggest emerging market was Ecuador, which saw a 106.2 percent surge in production. The top five biggest producers are China, Japan, Russia the US and India. China's crude steel production in 2009 reached 567.8mmt, an increase of 13.5 percent on 2008. This is a record annual crude steel production figure for a single country. China's share of world steel production continued to grow in 2009 producing 47 percent of world total crude steel, an increase of 9 percentage points compared to 2008. Asia produced 795.4mmt of crude steel in 2009, an increase of 3.5 percent compared to 2008. Its share of world steel production increased to 65 percent in 2009 from 58 percent in 2008. Japan produced 87.5mmt in 2008, a decrease of -26.3 percent on 2008. India's crude steel production was 56.6mmt in 2009, 2.8 percent growth on 2008. South Korea showed a decrease of -9.4 percent, producing 48.6mmt in 2009. The EU-27 where all major steel producing countries including Germany, Italy and France showed substantial decline recorded a decrease of 29.7 percent compared to 2008, producing 139.1mmt of crude steel in 2009. In 2009, crude steel production in North America was 82.3mmt, a decrease of 33.9 percent on 2008. The US produced 58.1mmt of crude steel, 36.4 percent lower than 2008. The CIS showed a decrease of 14.7 percent in 2009. Russia produced 59.9mmt of crude steel, a 12.5 percent reduction on 2008 while Ukraine recorded a decrease of 20.2 percent with year-end figures of 29.8mmt. In December 2009, world crude steel output for the 66 countries under WSA was 106.4mmt, an increase of 30.2 percent compared to December 2008. Most major-steel producing countries showed two-digit growth in December 2009. The world crude steel capacity utilization ratio of the 66 countries in December 2009 was 71.5 percent, a decrease from 74.7 percent in November 2009. Compared to 2008, the utilization ratio in December 2009 increased by 13.4 percentage points. Moreover, in the US, shipments for steel and aluminum also declined in 2009. According to a report last week from the Metals Service Center Institute (MSCI), steel product shipments from the nation's metals service centers came to 29.6 million tons in 2009, a 36.8 percent year-over-year decline. Aluminum product shipments totaled 1.04 million tons in 2009, a decrease of 38.4 percent from 2008. Although shipment rates for both materials continue to contract, the MSCI report notes that the overall decline is slowing down. “Final 2009 shipment numbers demonstrate how significantly the recession impacted the industrial metals industry,” the report said. “But, for the first time in more than a year, the monthly rate of decline in steel shipments moved into the single digits in the United States and were flat in Canada.” Despite going through a steep downturn in 2009, the steel industry may be approaching a rebound. Metals industry analysts expect steel production to rise by approximately 10 percent in 2010, as the $0.5 trillion steel market enters gradual recovery.
