Asia leads steel production to new record

By Reuters
Posted March 21 at 2:25 p.m.

Asia’s mills lead the world’s crude steel production rate to a new record in February, the World Steel Association said Monday, as demand from economic recovery gathered pace.

Output in the West edged up but lagged pre-recession levels, World Steel said.

Global crude steel production rose to 117 million tons in February, up 1.6 percent from February 2008, just months before the worst economic recession of the last few decades hit the steel industry.

“It’s a new all-time record. Emerging markets are all up meaningfully,” said analyst Michelle Applebaum of Steel Market Intelligence in Chicago.

But the steel industry is recovering at different speeds.

Crude steel output from China, the world’s top producer and consumer of the metal, rose 9.7 percent, to 54.3 million tons, from a year earlier.

World Steel said production in South Korea, Asia’s third largest producer, soared 25.7 percent, to 5 million tons, in February, from the previous year.

The United States remained down 17 percent from pre-recession levels, along with the European Union, down 15 percent, while emerging markets have surged with China up 24 percent India up 26 percent and South Korea up 15 percent from pre-recession peaks, Applebaum added.

Japan, the world’s second largest producer of steel, saw its production increase by 5.7 percent, to 8.9 million tons, in February 2011.

The earthquake and tsunami that disrupted production at a few plants and reduced electricity availability is likely to have an impact on March’s figures.

Steel production in the EU registered a 7.9 percent increase, to 14.4 million tons, while the United States had a 5.6 percent increase, to 6.6 million tons, in February 2011.

Crude steel output in North Africa and the Middle East was affected by the political tensions that caused some mills there to halt or reduce production.

Output in Libya, a minor producer, was down 56.1 percent in February from a year earlier.

The global steel capacity utilization ratio was 82.0 percent in February 2011, the highest level since May 2010 and up 2.7 percent from February last year.

Overcapacity remains an issue for the industry, especially in mature western economies, and if steelmakers ramp up production too much too quickly this could hit profitability.

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