Steel output in November lags 2021 pace

Global steel output this November dropped by 2.6 percent compared with production in November of 2021. The Brussels-based World Steel Association (Worldsteel) says the comparative figures come from the 64 nations whose national steel associations report to it.

In those nations, November 2022 crude steel production of 139.1 million metric tons means about 4.2 million metric tons less was churned out by melt shops compared with November 2021.

Year to date, 3.7 percent less steel has been made globally through November compared with the first 11 months of 2021. By percentage, the sharpest declines have been in Turkey, whose production is down by 12.3 percent this year, and in the European Union, where output has dropped 10.1 percent.

While the United States may not have suffered the soaring energy prices that Europe has this year, steel producers there also have scaled back production. In the first 11 months of this year, output of 74.4 million metric tons is down 5.5 percent from the 78.8 million metric tons made in the same timeframe last year.

By volume, the largest year-to-date decline in output has taken place in China. The world’s biggest producer of steel (by far) has only made 1.4 percent less steel this year compared with last year. However, because of its scale, that means output In China dropped by 11.3 million metric tons in the first 11 months of this year compared with the same timeframe in 2021.

Of the 10 largest steel producing nations reporting to Worldsteel, only two have boosted their output this year. In Iran, steelmakers have increased production by 8.0 percent, or about 2.2 million metric tons. And in India, steel output has risen by 6.0 percent so far this year, meaning about 6.9 million metric tons more steel were made in India in the first 11 months of this year compared with the same period last year.

For U.S. ferrous scrap exporters, the misfortunes of the Turkish industry have not yet shown up statistically in the first eight months of this year. U.S. Census Bureau data aggregated by the U.S. Geological Survey shows U.S. scrap exports to Turkey rising by about 1.8 percent in the first eight months of 2022 compared with the January through August 2021 timeframe (rising from 2.26 million metric tons to 2.30 million metric tons).

Scrap exports to India do correlate to that nation’s rising steel output. In the first eight months of 2021, U.S. shippers sent 420,000 metric tons of scrap to India. In the first eight months of this year, that figure rose by 41.7 percent to 595,000 metric tons.

In an October forecast, Worldsteel summarized Turkey’s prospects by writing, “The lira’s depreciation and high inflation are hurting its construction activities, leading to a contraction of steel demand in 2022 and only a limited rebound in 2023.”

In India in 2023, “Steel demand will show high growth on the back of strong urban consumption and infrastructure spending, which will also drive demand for capital goods and automobiles among other things,” writes Worldsteel.

The association cites a blend of factors likely to affect the U.S. economy in 2023, predicting a “struggling” construction sector but “positive momentum on the back of pent-up demand and easing of supply chain constraints” in the auto sector. “Overall, U.S. steel demand is not expected to turn into a contraction,” predicts Worldsteel.