Global steel production fell 5% in April

worldsteel data shows global crude steel production stood at 162.7 million tonnes in April, down 5.1% from the same month in 2021. This is the ninth month in a row that a decline has been recorded compared to last year.

The decline, which began in mid-2021, was initially due to rising gas and electricity prices affecting production in this energy-intensive industry. More recently, however, the resurgence of Covid-19 in China and the disruption to supply chains caused by the conflict between Russia and Ukraine have become dominant factors.

China

Steel consumption in China fell in April. The country continues to struggle with lockdowns imposed to combat the latest outbreak of Covid-19. Several financial firms and rating agencies subsequently cut their 2022 growth forecasts for China to an average of 4.5%, well below the government's official target of 5.5%. Despite this, crude steel production in China reached 92.8 million tons in April, accounting for 57% of the global volume.

The country is working to reduce its dependence on steel produced in blast furnaces. By 2022, projects have been announced to build approximately 14 million tonnes of new EAF steelmaking capacity. China wants this method to account for 15% to 20% of its total production by 2025.

Russia

Crude steel production in Russia remained robust last month despite the impact of economic sanctions and an embargo on the supply of finished steel products to Europe. Thus, the April production volume is estimated by Worldsteel at 6.4 million tons.

However, it should be noted that the numbers since the start of the conflict are approximate due to the lack of official reporting.

European Union

Crude steel production in the EU fell to 12.3 million tonnes in April. In the first quarter, imports of hot-rolled steel, cold-rolled steel and hot-rolled steel to the region decreased by 25%, 10% and 40%, respectively. The reduction in supplies from Ukraine and Russia has yet to be fully compensated by other countries.

Demand for recycling, for example in the automotive industry, has declined. This contributes to lower steel prices. Registration of passenger cars and commercial vehicles in the EU in April fell by about 25% compared to the same period in 2021
year. The steel industry in Europe is focusing on shifting to less carbon-intensive production methods due to its climate commitment and the desire to reduce dependence on Russian energy sources. However, it will take time to bear fruit.

United States

U.S. production reached 6.9 million tons in April 2022, bringing the year-to-date total to 27.1 million tons. This is 1.7% lower than at the same time in 2021.

Output declined as companies focused on decommissioning less efficient plants. Approximately 2.1 million tons per year were lost due to Cleveland-Cliffs shutting down Blast Furnace No. 4 at its Indiana Harbor facility.

Data from the American Iron and Steel Institute showed that capacity utilization rose 2.5% year-on-year to 80.6% in the month.

Iran

Iran's crude steel production is estimated to have fallen more than 20% year-over-year in April to 2.2 million tons. This can be explained by the downturn in the local economy.

The government increased the money supply as sanctions tightened, leading to severe inflationary pressures. This is exacerbated by the impact of the Ukrainian conflict in reducing the availability of essential goods. Restrictions in energy supply have also affected industrial demand.

India

India has resisted the global trend. The volume of production for the first four months of this year amounted to 42.3 million tons. This is 2.5 million tons more than in the same period in 2021.

However, it remains to be seen how the recently announced 15% export duty on HRC, CRC and HDG will affect these volumes. In total, India exported about 9 million tons of this material in 2021.