Global steel production surged on the back of China's leap: what's next?

Global crude steel production increased in August as steel mills in China - the world's largest steel producer - increased production after slowing in July due to tough smog measures in Beijing.

The World Steel Association ("WSA"), the international trade organization for the iron and steel industry, said crude steel production for its 64 member countries rose 3.4% year on year to 156 million tonnes (million tonnes) in August.

Chinese factories ramp up production

Production in China, which accounts for about half of global steel production, rose 9.3% year on year to 87.3 million tonnes in August. Chinese steel mills boosted production last month in anticipation of rising domestic steel consumption between September and October - typically during peak demand seasons - and to boost supply ahead of tighter abatement measures in key steel provinces in the country.

Growth rates in August also increased from 5% growth in July. Growth slowed in July as production cuts from Chinese mills in Hebei province hit by smog to curb pollution. Tangshan, China's leading steel city, has expanded production at its factories through the end of July to improve air quality. This intense production cut at a steel center in China's leading province of Hebei limited the rise in Chinese steel production in July.

Production in China rose 10% year-on-year, hitting a record high of 89.1 million tonnes in May as steel mills in the country increased production, even as the surge in iron ore prices from due to interruptions in production in Brazil, there was an increase in raw material prices. their profit

Overcapacity in China remains a major blow to the metals sector. Despite Sino-US trade tensions, Chinese steel mills boosted production last year to take advantage of strong margins. Steel production in China rose 6.6% year-on-year to 928.3 million tonnes last year.

Steel production in China rose 9.1% year-on-year to about 664.9 million tonnes in the first eight months of 2019, according to the WSA. The surplus of Chinese steel put downward pressure on both Chinese and world prices for rolled metal products.

How are other major manufacturers doing in August e

Among other major Asian producers, India - the second largest steel producer - posted a 1.5% increase in production to 9.4 million tonnes in August