Global steel production to fall for the fourth month in a row

Global crude steel production contracted for the fourth straight month in August, mainly due to declines in production in China and Japan, the two largest steel-producing countries in the world. Global steel output in August was down 3 percent to 132 million tons compared to August last year.

According to the World Steel Association (Worldsteel), China's production fell 3.5 percent to 66.9 million tons, while Japan cut output by 5.8 percent to 8.8 million tons. China accounts for about half of the world's steel production. Its steel output has experienced a drop as astronomical economic growth slows, leaving the country with overcapacity estimated at around 300 million tonnes of steel. China is exporting steel at record levels, and as a result, it was this factor that pushed the global steel industry to decline.

Steel product prices fell to a 10-year low, with little prospect of recovery in the near term. The latest data showed that the utilization rate of global steel production potential fell 3.6 percent to 68 percent in August, reflecting lower product prices. At the same time, the world's largest factories retain the ability to increase steel production if demand recovers.

The World Association's particular attention is focused on data showing a significant decline in production in the United States, the world's third-largest steel producer. Steel output in the United States, and literally in the United States of America (USA), fell by 10 percent. The country's producers are grappling with cheap imports and contract labor disputes. While steel output in India, the world's fourth largest steelmaker, rose 2.8 percent. India, a growing economy with about a billion people, is one single bright spot for global steel demand.