The steady decline in steel output matches the World Steel Associationrsquos recent shortterm outlook for steel demand anticipating a 17 fall for 2015 and a modest rebound of 07 in 2016

The steady decline in steel output matches the World Steel Association’s recent short-term outlook for steel demand, anticipating a 1.7% fall for 2015 and a modest rebound of 0.7% in 2016.

Global Steel Tonnage Dropped Again in September

Fourth straight month of declining output as demand wanes in major markets Capacity utilization, -4.0% Y/Y Chinese steel output -3.0% YTD U.S. steel output -8.6% YTD

Global raw steel production fell 1% to 130.9 million metric tons during September, down from 132.3 million metric tons during August. It was the fourth consecutive month of declining steel tonnage, according to the World Steel Association, which reports production and capacity utilization for its 66 member nations on a monthly basis. 

The new total also indicates a 3.7% year-on-year decrease from the September 2014 total, and it brings the nine-month production total for 66 countries to 1.212 billion metric tons, a 3.7% decline from the comparable total for January-September 2014.

The World Steel monthly report summarizes data for raw steel — the output of basic oxygen furnaces and electric arc furnaces, prior to alloying to specific grades and casting into semi-finished products, such as slabs, blooms, or billets. The results include data for carbon and carbon alloy steel output. Stainless steels and other specialty alloy steels are not included.

In addition to the declining production totals, the Association reported the September raw-steel capacity utilization rate for the 66 countries was 69.3%, up 1.3% from August and down 4.0% compared to September 2014.

The steadily declining activity in the global steel industry confirms the World Steel Association’s recent short-term outlook for steel demand: it forecast that the current year’s demand total would fall 1.7% below the 2014 total, down to 1.513 billion metric tons. For 2016, it forecast global steel demand growing 0.7% to 1.523 billion metric tons.

While the declining output is widely felt among the major steelmaking nations and regions, the falling output in China is the most noteworthy, as that nation has produced roughly half of all the world’s steel for each year since the turn of the century. In the past several years, however, China has been consolidating steel enterprises to reduce excess capacity, stabilize steel prices and management, and improve environmental standards. In the current cycle, China’s weakening industrial output is contributing to the decline in steelmaking activity.

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