On February 26, the World Steel Association released crude steel production data for January 2020 from 64 countries included in its statistics. Data show that driven by the increase in China ’s crude steel output, in January, global crude steel output was 154.4 million tons, an increase of 2.1% year-on-year.

The World Steel Association said that according to estimates released by the China Iron and Steel Association, China ’s crude steel output in January increased by 7.2% year-on-year to 84.3 million tons. At the same time, the output of crude steel in other countries and regions except China decreased by 3.4% year-on-year, and the decrease was significantly larger than that of 0.9% in the same period last year. This is consistent with the trends reflected in the previously released 2019 data. In 2019, global pig iron and crude steel output increased by 2% and 3.4% year-on-year, respectively, but the total output of other countries and regions, except China, declined, by 0.7% and 2.7%, respectively. This shows that from a global perspective, steel production levels are falling further.

Taking a closer look, according to 2019 data, global steel production presents two characteristics. On the one hand, in terms of crude steel output, the world ’s total crude steel output except China is declining. Among them, only a few countries such as India, the United States, South Korea, and Vietnam have increased their output; on the other hand, in terms of steel production methods, From the point of view, the increase in world crude steel output is more due to the increase in the output of short-flow steel mills based on electric furnaces, and the output of pig iron is falling (Note: crude steel output is not directly equal to pig iron output + electric furnace steel output, Production methods are mainly based on blast furnace and electric furnace).

This change, coupled with the impact of the epidemic, will drive down global iron ore demand.

Crude steel production declines in most parts of the world

By region, in 2019, except for Asia and the Middle East, crude steel production in other countries and regions in the world decreased year-on-year. Among them, the growth of crude steel output in the Middle East mainly comes from Iran, and other countries have negative growth. Among the major steel producers in Asia, except for China and India, which have maintained growth in crude steel production, Japan and South Korea have negative growth.

From the perspective of pig iron production, in 2019, except for China, India and South Korea, pig iron production in all other countries will decline. Among them, Brazil fell 8.7%, Germany fell 6.5%, Turkey fell 6.3%, Japan fell 3.1%, and Russia fell 2.7%. Although crude steel production in the United States increased by 1.5% in 2019, its pig iron output fell by 7.8% year-on-year, due to its high proportion of electric furnace steel (68% in 2018). Iran is also in a similar situation. Its crude steel output increased by 30% in 2019 to 31.9 million tons, but due to the proportion of electric furnace steel as high as 90%, its pig iron output in 2019 was only 2.735 million tons (a year-on-year increase of 15.8%).

The changes in global crude steel output in January 2020 continued the characteristics of 2019. In January 2020, crude steel production in the 28 countries of the European Union fell 12% year-on-year, of which Germany fell 17.7% year-on-year; South America decreased 10.6% year-on-year; CIS countries decreased 1.2% year-on-year, of which Russia decreased 4.1% year-on-year; Down 1.4%. At the same time, crude steel output from Asia and the Middle East increased year-on-year, with increased output from Asia coming from China. Except for China, Asian crude steel output decreased by 4% year-on-year. In addition, crude steel production in Iran, Turkey and the United States increased by 46.9%, 17.3% and 2.5% year-on-year respectively. It is worth noting that the proportion of EAF steel in Iran, Turkey and the United States is very high (90%, 68% and 69% respectively in 2018, and the proportion will further increase in 2019). Therefore, although the crude steel output of these three countries increased in January 2020, it will not basically boost the demand for iron ore.