Global steel production rises in March

Global steel production rises in March. World crude steel output rose more than 30 percent above the prior-year level in March, according to the World Steel Association. However, concerns remain over domestic shipments and a new set of steel import duties from China. Global production of crude steel increased 30.6 percent year-over-year in March, while capacity utilization rates among steel manufacturers rose to 80.2 percent, their highest level since late 2008, the World Steel Association (worldsteel) reported this week. Total production among the 66 countries tracked by worldsteel rose to 120 million metric tons in March, up from 108 million metric tons in February and well above the 92 million tons in March 2009. Following a 24.2 percent year-over-year gain in February, crude steel output continued its upward trend, with rising production in each of the major steelmaking countries last month. In China, the world's largest steel producer, output grew to 55 million tons in March, a 22.5 percent increase over the same period last year. Japan's production rose by 62.8 percent year-over-year, reaching 9.3 million tons, while India's production rose 9.2 percent to 5.5 million tons. In the first quarter of 2010, Asia produced a total of 219 million metric tons of steel, 27 percent higher than Q1 2009. Germany's crude steel output rose to 4 million tons in March, a 91.5 percent year-over-year increase, while Italy's output climbed 43.5 percent to 2.4 million tons and Spain's production rose 33 percent to 1.6 million tons. Europe's first-quarter production totaled 42 million tons of crude steel, up 37 percent from Q1 2009. Year-over-year crude steel output in the United States increased 74.2 percent last month, reaching 6.9 million tons, also up from the 5.98 million tons produced in February. The U.S. Geological Survey's (USGS) primary metals leading index, which tracks economic indicators, rose to 144.2 in March, up 2.4 percent from the 140.8 reading in February. According to the most recent USGS data, the steel leading index edged up 0.2 percent in February, largely due to increasing steel scrap prices. Despite the production gains, shipments from U.S. steel mills recently declined. A report from the American Iron and Steel Institute last week found that U.S. steel mills shipped 6.3 million net tons in February, down 4.1 percent from the 6,579,808 net tons shipped in January and 46.1 percent below the prior-year level. However, steel product shipments from U.S. metals service centers grew to 3.21 million in March, a 24 percent increase over the same month last year, according to the Metals Service Center Institute (MSCI) last week. Total steel shipments for the first quarter of 2010 came to 8.45 million tons, 11.2 percent above the first quarter of 2009. Rising demand has caused metals service centers to drive down inventories. The MSCI report found that steel inventories fell to 6.49 million tons at the end of March, a 17.2 percent decrease from prior-year levels and reflecting an "unusually low" two-month steel supply. Recent trade difficulties have become an additional area of concern for the steel industry. Following a U.S. decision to implement anti-dumping duties of up to 99.14 percent on Chinese steel pipe imports, last week China imposed countervailing duties on the U.S. and Russia regarding a common type of electrical steel often employed in the power sector, the Wall Street Journal reports. According to Reuters, the new Chinese regulations establish anti-subsidy duties on U.S. producers of up to 44.6 percent and anti-dumping duties of up to 64.8 percent. "China is encouraging its steel industry to move up the value chain and produce more high-tech steel," Reuters explains, "but its increased exports of those products threaten lucrative markets for American producers."