WORLD STEEL PRODUCTION REPORT

ISSB Monthly World I&S Review

WORLD STEEL REVIEW, July 2008

Production of crude steel for the 66 countries reporting to the IISI in May was estimated to be 119.5 million tonnes. This was 5.8% above the May 2007 total, and the year to date was 5.6% higher than the total for the same period in 2007 at 576.5 million tonnes. Excluding China however, the May increase was only 3.1% and the 5 months total only increased by 3.4%.

In the European Union crude steel production for the 27 was flat in May at 18.4 million tonnes compared to May 2007, although the five months to date fell by 0.7% to 90.0 million tonnes. German steel production was up 2.6% in May, bringing the year to date total to 20.2 million tonnes, 1.1% down on the previous year. French production was down by 6.3% in May, while the year to date total was down 7.6% to 8.2 million tonnes. Italian steel production, however, increased in May by 7.6%, although the five months total was only 2.6% up at 14.2 million tonnes. Spanish production fell in May by 2.7%, but rose by 1.4% in the year to date to 8.1 million tonnes. In the United Kingdom steel production rose by 4% in May, and by 0.5% in the five months to 5.9 million tonnes. Polish production decreased by 3.9% in May, with the year to date down 2.5% to 4.5 million tonnes. The other major West European steel producer, Turkey, showed a 12% rise in production in May, bringing the year to date total up 9% to 11.7 million tonnes. Serbian steel production rose 12.7% in May, with the year to date up 13.8% to 837 thousand tonnes.

EU27 imports of steel dropped to 10.2 million tonnes in Q1 2008, 22% below the Q1 2007 total. Exports in Q1 2008, on the other hand, were 10.9% up at 8.9 million tonnes, giving a negative balance of trade of 1.3 million tonnes compared to 5.1 million in Q1 2007. Italian imports were down 26.7% to 2.7 million tonnes, with German imports down 14.4% to 1.2 million tonnes. Belgian imports were 35% down at just under 1.2 million tonnes. These 3 countries accounted for half the imports in Q1 2008. Germany and Italy were also the largest exporters at 1.9 and 1.4 million tonnes respectively. In terms of products, the imports of semi-finished steel fell 29% to 2.1 million tonnes, while hot rolled coil imports fell 33% to 1.6 million tonnes.

According to ACEA, the European car manufacturers association, car registrations were down 7.8% in May, with the five months total down 0.7%. German registrations were 4.2% up in the year to date to 1.33 million cars. Registrations in Italy, on the other hand, were 10% down in the first five months to just under 1.1 million cars. UK registrations decreased by 0.6% in the year to date to 1.04 million cars. The French total was up 5.2% at 909 thousand cars, while the Spanish total was 14.3% down.

Russian crude steel production was 6.3 million tonnes in May, 4.3% higher than in May 2007; while the year to date total was 3.8% up at 31.6 million tonnes. Ukrainian monthly production increased by 4.6%, bringing the five months total to 18.5 million tonnes, an increase of 3.5%. In Kazakhstan the year to date total was 13.9% down at 1.7 million tonnes.

On the North American continent US crude steel production rose by 0.5% in May, and by 5.4% to 42.4 million tonnes in the year to date. Canadian steel production was up by 6.1% in the month, and by 4% in the five months to 7.0 million tonnes. Mexican steel production, on the other hand, increased by 16.5% in May, and by 12% in the year to date to 8.0 million tonnes, only just below the Spanish and French totals.

US imports of steel rose to 2.8 million tonnes in April, 16% up on March, and 4.6% up on April 2007. Imports of semi-finished steel, mostly slabs, jumped by 65% to 674 thousand tonnes, with imports of hot rolled coil up by 39% to 346 thousand tonnes. Welded tube imports actually fell slightly to 434 thousand tonnes. The semis mostly came from 5 countries: Canada, Mexico, Brazil, Ukraine and Russia. Canada was also the largest supplier of hot rolled coil with South Korea and the Netherlands in second and third place.

Crude steel production in the South American countries was very mixed, with Brazilian production rising by 2.8% in May, and by 6.8% in the year to date to 14.5 million tonnes. Argentinian steel production was up by 12.3% in the month, bringing the five months total to 2.4 million tonnes, an increase of 10.4%. In Venezuela, however, the monthly total fell by 12.5%, while the year to date total was down by 20.2% to 1.7 million tonnes.

In Africa, Egyptian steel production rose by 10.2% in the year to date to 2.8 million tonnes. South African production, however, fell by 2% in the five months to 3.7 million tonnes. In the Middle East, Iran showed a 25% increase in steel production in May with the year to date total up 3.5% to 4.25 million tonnes. Saudi Arabian steel production rose by 15% in the month, bringing the year to date to 2.1 million tonnes, an increase of 20%.

Turning to the Far East, Chinese steel production rose by 10.5% in May, bringing the year to date up 9.4% to 216.1 million tonnes, over 4 times the Japanese total. Japan's May production increased by 3.7%, making the year to date total 51.5 million tonnes, an increase of 4.2%. Crude steel production in South Korea was 4.7% up in the month, reaching 22.4 million tonnes in the five months, a rise of 5.1% on the previous year. India's production only showed a small rise in May of 0.3%, although the year to date total was up 4.1% to 22.9 million tonnes. Taiwan's monthly increase in steel production was 12%, bringing the year to date to 9.6 million tonnes, an increase of 11.3%.

Chinese steel exports increased to 5.5 million tonnes in May, 17% above the April total, although 22% below the May 2007 figure. Exports of hot rolled bars reached their highest level ever at 622 thousand tonnes, 34% up on April 2008. Hot rolled coil exports were also up 34% at 931 thousand tonnes, while exports of hot rolled plate dropped slightly to 762 thousand tonnes.

Chinese exports to the European Union jumped to almost 750 thousand tonnes with Italy accounting for 37% of that total. South Korea took almost 25% of total exports in May with Asian countries accounting for 55% of the total. Exports to the Middle East rose to 527 thousand tonnes, 9.5% of the total.