Global crude steel production might have risen 3.7% in 2021 to a record 1.95 billion tonnes according to the World Steel Association, but a second half slowdown led by top producer China took the gloss off what should have been a year in which output topped the 2 billion tonnes mark for the first time.
The full year rise was in fact sharply slower than the position at the end of the first six months in June when global production was up a large 14.4% to 1.003.9 billion tonnes.
The weaker second half saw total global output fall to 847.1 million tonnes as Chinese output fell 16% to 470.86 million tonnes of crude steel which explains most of the slowdown in growth and why the total fell short of topping the 2 billion total.
That slow down helped explain the slide in iron ore prices over the last months of 2021 to a most recent low of $US87.70 a tonne in November. prices have since recovered to around $US137 a tonne for 62% fe fines delivered to northern China.
With the Lunar New Year starting February 1 and then the Winter Olympics in Beijing four days later, iron ore demand and prices will drift until late February. The solid rise in prices since the start of the year linked to Chinese steel mills building stocks (a usual occurrence) ahead of the New Year.
That’s why Chinese first half production in 222 is likely to fall short of last year’s 563.3 million tonnes. May will e a key indicator month.
In 2021, China production almost reached 100 million tonnes for the first time at 99.45 million tonnes. By November, that had fallen 21% to just over 69 million tonnes.
Chinese steel production dropped 3% in 2021 to 1.033 billion tonnes, while second-ranked India saw output surge by 17.8% to more than $118 million tonnes and third-place Japan saw output recover by 15.8% to 96.3 million tonnes.
The US saw an 18% plus rise in output to 86 million tonnes, Russian production was estimated at 76 million tonnes (up 6.1%) and South Korean production was up 5.2% at more than 70 million tonnes.
The rises in Japanese and South Korean output helps explain why Australian iron ore exports were higher in 2021, especially through Port Hedland
Data for the last month of the year showed global steel production fell 3% year on year to 158.7 million tonnes.
Crude steel output from China, also the world’s top consumer of the metal, dropped by 6.8% to 86.19 million tonnes in December.
That was up 24% at 86.19 million tonnes 69.31 million tonnes in November but still 6.8% under the December, 2020 level of 91.25 million tonnes.
Steel output is seen falling further in 2022 to end the year under the billion-tonne level thanks to weak demand expected from property and continuing restrictions on output in northern steel-making cities up to the start of the June quarter.
After soaring 12% in the six months to June, steel production was crimped by at times harsh government controls on emissions and the impact of power shortages in September and October, plus the weaker demand from property and construction in the closing months of the year.
Australian production rose 6% to 5.8 million tonnes, according to the World Steel Association report.