World crude steel production up 3.3% y-o-y in Jul'21

World crude steel production for the 64 countries followed by the World Steel Association (WSA) grew by 3.3% to 161.70 million tonnes (mn t) in Jul'21 as against 156.53 mn t in the corresponding period last year (CPLY).

Also, in the Jan-Jul'21 period, cumulative output stood at 1,165.30 mn t, up 12.4% y-o-y.

Top three steel producing nations

1. China's crude steel output down 8.4%: China's steel output stood at 86.80 mn t in Jul'21, a drop of 8.4% against 94.76 mn t recorded in CPLY.

• In July, mills had reduced production at blast furnaces for a week to ensure clean air ahead of the centenary celebrations to commemorate the founding of the Chinese Communist Party.
  
  
• Adverse weather conditions and seasonally weak demand.
  
  
• Lower allocations for exports due to the on-going production curbs. For instance, Chinese finished steel exports fell to 5.68 mn t in Jul'21 compared to 6.46 mn t in Jun'2l.
  
  

During Jan-Jul'21, production volumes stood at 649.30 mn t, up 8% y-o-y against 601.20 mn t seen in the same period last year.

2. India's crude steel output up 13.3% y-o-y: India, the second-largest steel producing nation, churned out 9.80 mn t in Jul'21 against 8.65 mn t in the preceding year.

• Mills increased their capacity utilisation rates. Steel major JSW reported capacity utilisation at 92% in July against 83% in Jul'20, as per a press release.
  
  
• Increased demand from the overseas market led to increased exports. India's finished flat exports stood at 1.43 mn t in Jul'21 as against 1.34 mn t a year ago, up by 7% y-o-y.
  
  

Furthermore, in Jan-Jul'21, mills produced 28.7% higher at 68 mn t compared to 52.84 mn t in the year-ago period.

3. Japan's crude steel production up 32.5% y-o-y: Japanese mills produced 32.5% more of crude steel at 8 mn t in Jul'21 in comparison to 6.04 mn t in CPLY. Also, in Jan-Jul'21, production rose by 16.2% y-o-y to 56.10 mn t compared to 48.28 mn t in Jan-Jul'20.

• Improved downstream demand on the back of recovery from Covid-induced slump.
  
  
• Japanese steel exports moved up to 2.14 mn t in Jul'21 as against 1.17 mn t last year, thus, production volumes also increased.
  
  

Outlook

Crude steel output in the upcoming months may decline further because of certain concerns:

• Production curb norms will get more stringent ahead of the Olympics and Paralympics to be held in China in Feb-Mar'22.
  
  
• China's drive to become carbon neutral by 2030 and Japan's plans to achieve the same by 2050 might bring in more restrictions.
  
  
• Surge in Covid-19 cases and fierceness of the Delta+ variant might have an impact on the production volumes of countries in South East Asia.