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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.
In 2009, global steel output fell by 8 percent compared to 2008 levels, according to the World Steel Association (worldsteel) last week. Total crude steel production for the 66 countries providing data to worldsteel was estimated at 1.22 billion metric tons in 2009, the lowest level since 2005.
The majority of steel-producing countries and regions, including North America, the European Union, South America and Eastern Europe, experienced declines in steel production in 2009. However, both Asia and the Middle East showed steel output growth last year. Among the top 10 steel-producing countries, only China and India reported increases, which totaled 13.5 percent and 2.7 percent, respectively.
Crude steel production in North America fell to 82.3 million metric tons in 2009, a 33.9 percent decrease from the previous year, while EU output dropped 29.7 percent, for a total of 139.1 million metric tons. Asian steelmakers reported a 3.5 percent increase, reaching 795.4 million metric tons and raising their share of global steel production from 58 percent in 2008 to 65 percent in 2009.
Despite widespread declines through most of the year, worldsteel found that December 2009 steel production showed double-digit growth among most of the major steel-producing countries, climbing 30.2 percent above December 2008 levels. Steel capacity utilization for the last month of the year came to 71.5 percent, an improvement of 13.4 percentage points over December 2008.
2009 crude steel output from the United States declined 36.4 percent, for a total of 58.1 million metric tons. The nation's share of global steel production fell from 6.9 percent in 2008 to 4.8 percent in 2009, placing it behind Russia, Japan and China.
While Japan and Russia experienced declines of 26.3 percent and 12.5 percent, respectively, China, the world's top steel producer, raised total production to 567.8 million metric tons, boosting its production share to 47 percent of the world total crude steel, up from 38 percent in 2008.
China's continued output gains makes it poised to drive steel industry growth for 2010. "Even at a modest growth rate (by Chinese standards) of 8 percent to 10 percent, the impact on the global industry will be huge," John Lichtenstein, metals industry director at consulting firm Accenture, told Reuters.
These rapid increases may have a downside, however, as the country's record-breaking steel output is expected to raise pressure for Chinese steelmakers to accept higher prices on iron ore, a key component in steel production, during future negotiations with the mining industry, Agence France-Presse reports.
In the U.S., shipments for steel and aluminium 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 centres came to 29.6 million tons in 2009, a 36.8 percent year-over-year decline. Aluminium product shipments totalled 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 explains. "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. According to Reuters, metals industry analysts expect steel production to rise by approximately 10 percent in 2010, as the half-trillion-dollar steel market enters a gradual recovery.