LONDON: Global steel production growth slowed in May, data from an industry body showed, with output expected to remain sluggish in the coming months as weak economic growth erodes demand.
Global steel production rose by just 0.7 percent in May compared with the same month last year, to 131 million tons, according to data released by the World Steel Association (Worldsteel).
Global production had risen by 1.8 percent year-on-year in March and by 1.2 percent in April.
Output in China, the world’s largest producer and consumer of the alloy, rose by 2.5 percent to 61.2 million tons in May, a slower growth level compared with previous months.
“Output in China is still too high relative to demand and that is keeping prices in China weak and keeping exports out of China strong, which is having a bearish impact on prices generally,” said Patrick Cleary, principle steel analyst at Wood Mackenzie.
“We have weak demand conditions in Europe, stagnant (demand)in Japan and the US has not been as positive in terms of additional demand recently. So there are lots of bearish demand signals but the output isn’t really catching up just yet.”
Global steel consumption growth will slow in 2012, hit by weaker economic growth in top consumer China and uncertainties about the debt crisis in the euro zone, Worldsteel forecast in April.
Steel production in Japan, the world’s second-largest steelmaker, rose 2 percent year-on-year to 9.2 million tons.
In the US, steel production in May rose 7.4 percent year-on-year to 7.7 million tons.
Steel demand in the world’s largest economy has been relatively strong in the last few months and this has supported steel prices and production levels.
This contrasts with demand from the European Union industrial sector which remained weak due to uncertainty about the region’s economy growth prospects.
Steel production in the region fell 5.5 percent year-on-year in May to 15.3 million tons.
Steel output growth slows
