Steel output languishes; OECD warns of trouble

Steel output languishes; OECD warns of trouble
<![CDATA[

The Brussels-based World Steel Association (Worldsteel) says steel output in nations that report to it was down 3 percent this August compared with August 2021. In Paris, the vice-chair of the Organization for Economic Co-operation and Development (OECD) Steel Committee has released a statement referring to the sector as experiencing a “sharp downturn.”

Worldsteel says crude steel production this August in the more than 60 countries reporting to it was 150.6 million metric tons, representing a 3 percent decrease compared with August 2021.

Among the largest steel producing nations, China actually produced 0.5 percent more steel this August compared with its August 2021 figure. India, likewise, witnessed a 1.2 percent rise in production.

Much of the rest of the world, however, experienced a low-output August this year, with United States mills making 71 percent less steel and mills in Turkey (the largest importer of ferrous scrap globally) off a whopping 21 percent year-on-year in August.

In Europe, Germany’s sector was off 2.3 percent year-on-year in August while Worldsteel estimates Russia’s output dropped 5.5 percent.

Year-to-date, India could be considered the only major steel producing nation with increased output in 2022. Iran—thanks to a reported 64 percent rise in August 2022 output compared with August 2021—also now has experienced a year-to-date gain.

The decline in OECD nation output has caused Sheryl Groeneweg of that body’s Steel Committee to write in mid-September, to write about “concerns about the sharp downturn in world steel markets [that have been] exacerbated by rising energy prices but also a range of inflationary factors.”

Groeneweg writes in the Steel Committee statement, “Global steel consumption has contracted significantly in the first half of this year due to the rapidly deteriorating economic environment. Steel producers’ profitability is coming under considerable strain along with sharply declining steel prices and surging energy costs.”

In the U.S., steel producers remain profitable, although several have warned of narrower profits in their financial quarters covering the third quarter of this calendar year.

While much is written about a move toward sustainable, low-carbon steel, the global market is not necessarily supporting that notion, Groeneweg implies. “Much of the world’s capacity growth in recent years has been concentrated in the Middle East, South Asia and Southeast Asia. Many of the new installations in Asia have been focused on the coal-intensive steel production process.”

With that steel putting a low ceiling on the global price, the committee cited pressures on the OECD’s ability to chart a low-carbon course. “In this context, delegates noted that efforts should be made to ensure that policy support to encourage low-carbon steelmaking does not lead to net capacity increases that would exacerbate global excess capacity and contribute to trade frictions,” Groeneweg writes.

She adds, “The Committee agreed that the decarbonization of the steel sector is one of the priorities in its next program of work, and that it aims to operate as a platform to encourage the sector’s green transition under conditions of fair and non-distortive competition.”

In Europe, the scrap sector has expressed alarm about trade restrictions looming for scrap metal exports, and the OECD has in noticed. “Protectionist tendencies are emerging in some economies in the area of steelmaking raw materials. Delegates took note of export restrictions on scrap as a trade challenge for the steel sector. To address these challenges, the Committee had in-depth discussions with representatives from the mining and raw material sectors with a view to raising awareness about alternative sources of raw material supplies for their steel industries, with an emphasis on sustainable raw materials.”

]]>
Source: Recycling Today
Steel output languishes; OECD warns of trouble
<![CDATA[The Brussels-based World Steel Association (Worldsteel) says steel output in nations that report to it was down 3 percent this August compared with August 2021. In Paris, the vice-chair of the Organization for Economic Co-operation and Development (OECD) Steel Committee has released a statement referring to the sector as experiencing a “sharp downturn.”Worldsteel says crude steel production this August in the more than 60 countries reporting to it was 150.6 million metric tons, representing a 3 percent decrease compared with August 2021.Among the largest steel producing nations, China actually produced 0.5 percent more steel this August compared with its August 2021 figure. India, likewise, witnessed a 1.2 percent rise in production.Much of the rest of the world, however, experienced a low-output August this year, with United States mills making 71 percent less steel and mills in Turkey (the largest importer of ferrous scrap globally) off a whopping 21 percent year-on-year in August.In Europe, Germany’s sector was off 2.3 percent year-on-year in August while Worldsteel estimates Russia’s output dropped 5.5 percent.Year-to-date, India could be considered the only major steel producing nation with increased output in 2022. Iran—thanks to a reported 64 percent rise in August 2022 output compared with August 2021—also…