2010: steel production sees biggest increase in 55 years.

Steel production sees biggest increase in 55 years. World steel output rose last year by 15 per cent in the biggest annual increase for more than half a century, as demand for the commodity soared in the aftermath of the economic crisis. The rise came after a decline of 7.8 per cent in 2009, when the industry was one of the sectors worst hit by the global recession, according to data published on Friday by the World Steel Association. The year-on-year jump in world production in 2010 was last surpassed in 1955, when output rose 20.2 per cent to 270m tonnes. The output of 1.4bn tonnes was comfortably above the previous record production figure registered in 2007 of 1.3bn tonnes. World output is likely to show another rise this year, experts believe, but by a much lower amount than last year. Strength of demand, allied to large rises in the costs of raw materials such as iron ore and coke, are contributing to a marked rise in steel prices, which have gone up by a third in the past two months, adding to fears about inflation. There are worries, too, in the industry that the scale of the price increases may deter some buyers, particularly in countries where the economy is still fragile. Iron ore prices hit an all-time high this week above $175 a tonne, excluding freight, and the price of coking coal has surged in the spot market to $350 a tonne, approaching the $400 a tonne record of 2008. The strength of the rise in world production in the past 12 months has surprised analysts, who at the start of last year were predicting a rise of about 11 per cent. In its last forecast in October, the WSA said steel demand, which normally follows a similar pattern to output, was likely to be up by 13 per cent in 2010. The jump in production last year was led by the US, where the increase was 38 per cent, while output in Japan rose by a quarter. Both countries, the third- and second-biggest steel producers respectively, had suffered large falls in output in 2009 as customers in construction, carmaking and engineering cut back purchases. China, which as the world’s biggest steel producing and consuming country was responsible for 44 per cent of global output last year, pushed up output by a relatively modest 9.3 per cent. But this increase came after a 14.6 per cent surge in output in 2009, as the Chinese economy powered ahead. Steel output in Germany rose 34 per cent in the year, while the amount of steel made in India, a strong performer in the steel industry in recent years, went up by muted 6.4 per cent. Of the world’s top 40 steelmaking countries, only two, Britain and Venezuela, showed a decline in production last year. The UK’s output fell 3.7 per cent to 9.7m tonnes.