Latest steel report shows global steel production declined in December
According to a recent report by Majestic Steel, global steel production declined in December after a slight increase in November. At the close of 2019, "global production totaled 1.845 billion metric tons, up 3.1 percent from 1.790 billion metric tons in 2018." The report reads:
December production declined to 4.907 million metric tons/day (152.1 million tons total). This is down from 4.930 million metric tons/day in November but up from 4.737 million metric tons/day in December 2018. This was the first y/y increase in per/day production since August.
Meanwhile, production from China increased to a 2.718 million metric tons/ day rate. That is a 1.6 percent increase when compared to November 2019 and a 10.7 percent increase when compare to December 2018. Overall, production in the U.S. increased for the third consecutive month.
For greater context, domestic raw steel production dipped slightly last week after six consecutive weekly increases. U.S. mills produced an estimated 1,919k tons at an 82.3 percent utilization rate. According to Majestic Steel's findings, "this is down from 1,928k tons and an 82.7 percent rate previously."
However, production is still above the 80 percent utilization rate that mills strive for. "Production decreased in three of the five regions, with the largest decrease (in tons) coming from the Southern region. Production from the Southern region dropped from 730k tons to 709k tons. Year-to-date production is now 1.2 percent above the same time-frame from last year."
Carbon Steel Imports
On the carbon steel front, imports were mostly flat measured on a month-over-month basis in December and remained at multi-year lows. According to the report, carbon steel imports totaled 1.151 million tons in December. This is up slightly from November but down nearly 20 percent from last December. "Carbon flat rolled steel imports totaled 412,687 tons in December, up 10.2 percent from November but still down 12.7 percent from December last year."
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"Zinc pricing decreased significantly this week, now down for the second consecutive week. Zinc pricing ended the week at $2,219/mt ($1.007/lb), down from $2,354.50/mt ($1.068/lb) previously. Zinc fundamentals softened amid concerns about the coronavirus outbreak in China. Global zinc inventory decreased significantly this week after four consecutive increases. Shanghai warehouse inventory decreased to 40,433 metric tons from 49,273 metric tons previously. LME warehouse inventory dropped to the lowest level since September 1990, falling to 49,775 metric tons."
Spot Iron Ore Pricing
"Spot iron ore pricing decreased significantly this week after four consecutive weekly increases. Spot iron ore pricing ended the week at $83.00/mt, down from $95.40/mt a week ago. Prices slumped on concern that demand in China may be disrupted by the spread of the coronavirus, and as no. 4 producer Fortescue Metals Group Ltd. posted an increase in shipments. The miner’s operations in China have not been impacted yet, however concerns over the effect of the virus has impacted sentiment. China’s Council for the Promotion of International Trade has offered Chinese businesses affected by the coronavirus outbreak force majeure certificates as the country looks to protect businesses and reduce losses."
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