Strong Growth in China Pushes World Steel Output Up 6.1% in September

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Researched by Industrial Info Resources (Sugar Land, Texas)--World steel production in September increased to 132 million tonnes, annualizing to 1.61 billion tonnes. According to figures from World Steel Association, steel production increased 6.1% in September from the previous year, primarily due to strong output growth in China.

In China, which produces half of the world's steel and is the top consumer, production increased to 65.4 million tonnes in September, an 11% jump when compared with the previous year. China continues to produce more steel than it consumes, constraining a fledgling global steel price recovery. China's demand for steel typically decreases in November due to seasonal factors, which contracts the construction sector.

Chinese government policies imposed in 2012 to restrict new housing developments caused commodity demand to drop to 3% from 2011 to 2012. China's gross domestic product expanded 7.8% last quarter, China's statistics bureau said last week, matching market expectations of 7.8% growth.

European steel output picked up in September to 14.3 million tonnes, from 12 million tonnes in August, while India is heading for an 80 million-tonne year, up from 77.6 million tonnes in 2012. The figure was at odds with the view of economists, who see the Indian economy as unable to sustain momentum. With a decade-low growth rate of 4.4% in the second quarter, India's $1.8 trillion economy has damped demand for commodities such as coal, especially as factories run below capacity.

In its latest update to the World Economic Outlook, the International Monetary Fund (IMF) estimated that the Indian economy would grow just 3.8%, sharply lower than the 5.6% forecast in July.

Crude steel production in Japan, the world's third-largest producer, increased to 9.3 million tonnes in September, up 5.5% from 2012, after having fallen 0.6% in August. The IMF projected Japanese growth, spurred by government stimulus spending, was set to reach 2%, but lowered the projection to 1.2% for 2014.

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