The 2008 financial crisis led to one of the largest declines in steel output in decades, falling almost 10% from 2007 to 2009, according to the World Steel Association (WSA). The slow recovery, however, already signals a reversal: in the first three quarters of 2013, global steel production rose to 1.582 million metric tons (mmt), an increase of 2.7% year-on-year, according to a report from the OECD Steel Committee’s latest session. It’s mostly coming from one place: China controls almost half of the market now, growing 8% year-on-year in the first three quarters of 2013 to an all-time high of 783 mmt. Steel production in the rest of the world actually declined 2% to 798 mmt. Output in Europe remains weak (more about that later).
The year did not start well: January saw a 0.4% decline year over year in global crude steel output, according to the WSA, compared to a 6.3% rise in December 2013. Even China fell 3.2% in January.
But the WSA projects a 3.3% increase in 2014 in global steel usage, much of it coming from the developed economies recovering from the recession. And a big driver turns out to be the U.S.
The reports of the U.S. steel industry’s death in the 1980s turned out to have been greatly exaggerated. While output is nowhere close to the 150 million short tons produced in 1973, the 95 million short tons rolled out in 2013 means that the U.S. remains the third largest steel producer in the world, according to a report by McGraw-Hill Financial. And demand for steel is only expected to increase now that the country is out, tentatively perhaps, of its Great Recession: according to the report, America’s auto industry is healthy again, construction projects put on hold in 2008 are coming back online, and the country’s aging infrastructure means thousands of roads and bridges will need repairs in the next decade.
By Sasha Dlinni
Originally Published in the Steel Market Update: Saturday, March 22, 2014 12:06 AM