World steel production - ISSB monthly commentary.
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Steel Production Report
September 2017

ISSB Monthly World Steel Production Review

Production of crude steel for the 67 countries reporting to the World Steel Association in July was estimated to be 143 million tonnes. This was 6.3% above the tonnage in July 2016, and the year to date was 4.7% above the total for the same period in 2016 at 977 million tonnes. Excluding China, however, the July total was only 2.4% higher than in July 2016 and the seven months' total was 4.2% up on 2016. China accounted for just over 50% of world steel production in the first seven months of 2017.

In the European Union crude steel production for the 28 countries also rose by 3.8% in July to 13.65 million tonnes, compared to July 2016. This brought the seven months' year to date total up 3.9% at 99.6 million tonnes. German steel production grew by 3.6% in July, and the year to date total at 25.7 million tonnes was 1.9% higher than the previous year. Italian steel production increased by 1.7% in July, and was 1.6% up in the seven months to 14.5 million tonnes. French production grew by 1.7% in July, while the year to date total increased by 8.5% to 9.1 million tonnes. Spanish steel production grew by 8.1% in July, reversing the declines earlier in the year, and bringing the year to date total up by 1.5% to 8.3 million tonnes making it the fourth largest steel producer in the EU behind France, Italy and Germany. The fifth largest producer, Poland, is the main driver of growth in the EU, however, with production up 23.2% in July and 17.1% in the year to date to 5.9 million tonnes.

Although much of the growth in Polish production has been to supply the local market, some of the increase has led on to growth in exports. In the first four months of the year, Polish exports increased by 9% with particular growth seen in shipments of HRC to other European markets such as France, Germany, Italy, Belgium and Hungary.

Turkish steel production rose by 27.8% to 3.3 million tonnes in July and by 13.6% to 21.6 million tonnes in the seven months. Serbia's production in the six months jumped by 42% to 836 thousand tonnes compared to 2016. Bosnian steel production was down by 13% in the year to date to 431 thousand tonnes, while in Norway steel production fell by 0.5% to 334 thousand tonnes.

According to ACEA, the European car manufacturers association, car registrations rose by 2.1% in June, and the six months total increased by 4.7% to 8 million cars. German registrations were down by 3.5% in June, bringing the year to date total to 1.79 million cars, 3.1% above the 2016 total. UK car registrations actually fell by 4.8% in June, and by 1.3% in the year to date to 1.4 million cars. Registrations in Italy rose by 12.9% in June, and increased by 8.9% in the first six months to 1.14 million cars. In France registrations increased by 1.6% in June, bringing the year to date total to 1.14 million cars, an increase of 3%. The Spanish six months' total rose by 7.1% to 667 thousand cars.

Russian crude steel production was 8% down in July at 5.6 million tonnes, while the year to date total was 0.5% down at 40.9 million tonnes. Ukrainian monthly production dropped by 13%, bringing the seven months total to 12.3 million tonnes, a decrease of 15%. In Kazakhstan the year to date total was up by 10.8% to nearly 2.7 million tonnes, while in Belarus it grew by 4.7% to 1.3 million tonnes.

On the North American continent US crude steel production increased by 1.4% in July and by 1.9% to 47.6 million tonnes in the year to date. Canadian steel production was 1.6% up in the month, and 0.7% higher in the seven months to 7.7 million tonnes. Mexican steel production increased by 2.1% in July, and rose by 9.9% in the year to date to 11.8 million tonnes.

Crude steel production in the South American countries was varied with Brazilian production rising by 1% in July, and 10.6% in the year to date to 19.6 million tonnes. Argentinian steel production decreased by 0.3% in the month, bringing the seven months total to 2.5 million tonnes, an increase of 2.7%. In Colombia the monthly total fell by 1.5%, while the year to date total was down by 0.5% to 723 thousand tonnes. Peruvian steel production was 9.8% up in the seven months to 722 thousand tonnes. Chilean year to date steel production fell by 2.8% to 674 thousand tonnes.

In Africa, South African steel production was 10.3% lower in July and was 4.4% down in the year to date to 3.6 million tonnes. Egyptian production jumped by 19.5% in July and by 34.4% in the seven months to 3.7 million tonnes. In the Middle East, Iran showed a 29.5% increase in steel production in July with the year to date total up by 15.8% to 11.7 million tonnes. Saudi Arabian steel production, however, fell by 7.6% in the year to date to 2.9 million tonnes. Production in the United Arab Emirates rose by 9.9% in the seven months to 1.9 million tonnes.

Turning to the Far East, Chinese steel production increased by 10.3% in July to 74 million tonnes, bringing the year to date total up by 5.1% to 492 million tonnes, 50% of world production. Japan's July production, however, was down by 4.3%, while the year to date total was 0.2% lower at 60.9 million tonnes. Crude steel production in India was up 3.5% in the month, making 58 million tonnes in the seven months, an increase of 5.4% on the previous year. South Korea's production increased by 2.3% in July, while the year to date total was up by 3.5% to 40.9 million tonnes. Taiwan's monthly production increased by 5.5%, bringing the year to date total to 13.6 million tonnes, an increase of 7.4%. Vietnam's year to date total nearly doubled to 5.4 million tonnes.

Despite the huge growth in Chinese production, their output continues to be in order to satisfy internal demand and exports from the country have actually reduced by 32% in July, year on year. This decline is across most markets but has been more acute in long products with shipments of wire rod down 51%, exports of HR light sections falling by 51% and exports of HR bars down 79%.

Steve Andrews
ISSB Ltd


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