Steel crisis: global production falling, and there is no optimism for the near future
In February, almost all major steel-producing countries, ten of which account for 80% of global steel production, reduced production. According to the World Steel Association (WSA) , there has been a global decline in production which has also reverberated in eastern markets . . Market participants and analysts do not expect a rapid recovery in production.
The decline was 3.4% globally and 3.3% for China, while the rest of the world fell 3.5% in February.
Crude steel production, absolute quantities (the bars) and percentages (the continuous graph) ROW is Rest of the World. from Worldsteel.org
The rate of decline in steel production in Russia in February was on par with the world average, according to an analysis by the World Steel Association (WSA ).
According to the organization's estimates, steel production in Russia fell by 3.4% year-on-year, reaching 5.8 million tons during the month. Production in the 69 countries that provide WSA data also fell 3.4% in February to 144.7 million tonnes. Russian fusion fell by 2.5% in the two months, while global fusion fell by 2.2%.
Control center of a large steel mill
Among the ten largest steel-producing countries, which account for more than 80% of global production, eight reduced production in February.
The exceptions are India and South Korea, where, according to the WSA, production increased by 6.3% and 0.7%, to 12.7 and 5.2 million tonnes respectively. India also remains positive in its results for the two months.
The main countries by global steel production in the period January-February 2025 and the geographical areas
The main steel producing countries in February, with production changes compared to the previous year, were the following:
China, the world's largest steel producer, saw its casting production in February fall 3.3% from a year earlier to 78.9 million tonnes. For the two months, the figure fell 1.5% to 166.3 million tonnes, according to the WSA. China could reduce steel production by 50 million tons this year due to the slowdown in the country's economic activity, the trade war with the United States and the surplus of metal on the world market
Steel consumption in China has fallen even further as Chinese exports increased 6.7% in the first two months compared to last year, reaching 16.97 million tons, and this must cast some doubt on the domestic economic data, unless the country is producing cars and concrete with plastic.
Heating of steel ingot before entering a hot rolling mill in South Korea
At the same time, many Chinese producers are facing negative export profitability due to falling steel prices, i.e. they are dumping to keep their plants running. Trump is not entirely wrong to impose tariffs on steel.
According to WSA data, Russian steel production fell by 1.7% month-on-month in February. Other steel-producing countries have seen higher rates. Thus, in China steel production in January fell by 3.7%, in Japan by 5.9%, in the United States by 9%.
For large geographical areas the situation is as follows:
The only area that is expanding is Africa, which however has limited production. For the rest the data are negative, with peaks for the Middle East and non-EU Europe.
Industry operators and experts do not see any signs of improvement in the market situation,
The market in the coming months, according to some forecasting bodies , will have a series of guiding reasons:
- the main reason, at this stage of the market, is excess supply. This will have consequences on the price which will remain stable, at best.
- rising prices in the USA due to duties, which cannot be immediately offset by domestic demand, with the risk of a drop in demand;
- China will see a decline in both domestic demand, especially from the real estate sector, and exports, in this case due to tariffs imposed in the USA. Dumping cannot continue forever and therefore exports will come;
- Europe, which is one of the areas that has paid the hardest price for the crisis, should see a slight recovery in production in the coming months and, above all, in the second half of 2025.
- Japan is perhaps the only area where there are prospects of a slight recovery in production, especially due to decent domestic demand.
Therefore, a price recovery in the coming months is not to be expected. In the best case scenario, to be verified, there will be a stabilization of prices, but some markets will have severe difficulties.
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The article Steel crisis: global production falling, and there is no optimism for the near future comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/crisi-acciaio-produzione-mondiale-in-calo-e-non-ce-ottimismo-per-il-prossimo-futuro/ on Thu, 27 Mar 2025 17:27:54 +0000.