Which were the top steel producing companies in 2023? - A BigMint lowdown

• Six Chinese mills among top 10 worldwide
  
  
• Tata Steel secures 10th spot, JSW moves up ranking ladder
  
  
• Major capacity additions in pipeline for Indian, Chinese, Korean mills
  
  

Morning Brief: Despite macroeconomic headwinds, energy inflation and high cost of capital - not to forget the sustained downtrend in China's property and construction sector - global crude steel production inched up by a marginal 0.11% y-o-y in 2023 to 1,892 million tonnes (mnt), as per latest data published by the World Steel Association (WSA).

Notably, crude steel production in 2020 and 2021 had edged up owing to China's dramatic post-pandemic recovery since mid-2020. However, persistent pandemic outbreaks, steel output control measures and severe downturn in China's steel-consuming sectors weighed on global steel production.

However, WSA data reveals that as many as six Chinese steel producers were among the 10 top steel mills in the world in 2023.

Energy hyperinflation following geopolitical conflicts since April 2022 and tightening of monetary policies by major economies impacted the global steel market and the steel-using downstream sectors. This accounts for the slight slowdown in global steel production since 2022

Some top producers

China's Boawu Group emerged as the top global steelmaker with total production at 130.77 mnt, down 0.8% y-o-y. Successive mergers and acquisitions have catapulted Baowu to the top position ahead of ArcelorMittal. In 2023, the Chinese steel industry faced challenges including low demand amid property sector crisis and high raw material costs. This led Baowu Group to cut production volumes.

ArcelorMittal's crude steel production in 2023 remained relatively stable at 68.52 mnt compared with 68.89 mnt in 2022. The globally diversified steel producer has hacked capacity in the US by selling off key assets to Cleveland-Cliffs. Moreover, the temporary disabling of blast furnaces at Gijon, Spain and Dunkirk, France would have reduced ArcelorMittal's overall capacity.

While the overall steel sector in China faced challenges in 2022, with shrinking demand and fluctuating prices and while global steel production remained flat or even decreased in some regions, Ansteel implemented improvements to streamline its production process, resulting in slightly higher output at nearly 56 mnt.

Nippon Steel, which contributes around 40% of Japan's total crude steel output, saw y-o-y decline in production to around 43.66 mnt in in 2023. Japan's crude steel output fell by 2.5% y-o-y to 87 mnt, the lowest since 2020 on weak demand in manufacturing and construction sectors. Domestic steel consumption also dipped 2.6% to 45.3 mnt led by the construction sector.

HBIS aimed to reach full capacity in March 2023 after a shutdown in July 2022. This restart suggests a potential increase in overall production capacity for 2023. A new hot rolling mill started production in 2023, indicating an effort to expand capacity.

China's Shougang is advancing rapidly in implementing energy-saving technologies for steel production. Perhaps a shift towards newer methods resulted in a slight decrease in overall output y-o-y.

POSCO, which reclaimed the 7th spot, increased production after the recovery from the flood damage. Despite facing early recovery challenges due to flooding at the Pohang Steel Mill last year, it swiftly stabilised operations and ramped up production and sales. South Korea's crude steel production climbed by 1.3% in 2023 compared to 2022, reaching 66.7 mnt.

The sole Indian steel producer to find a spot in the top 10, Tata Steel's total output stood at 29.50 mnt out of which its India operations alone accounted for 20.8 mnt, up 4% y-o-y. The company is increasing BF-based capacity in India and EAF capacity both in India and Europe. Notably, India's JSW Steel moved up from the 15th to the 12th spot, with output standing at 26.15 mnt in 2023, up 12% y-o-y.

Top steel producing companies 2023

Outlook

WSA has forecast early signs of global steel demand settling in a growth trajectory in 2024 and 2025. However, production control in China may weigh on overall crude steel volumes in 2024.

Among the top producers, Baowu, HBIS, Ansteel and other Chinese steelmakers have invested in steelmaking and even ironmaking capacity. In India, 15-16 mnt of capacity will be added in 2024 - mainly by the major integrated mills. Even South Korean giant POSCO has invested heavily overseas such as in Indonesia.

Therefore, the top global mills are likely to witness an uptick in volumes in 2024.