There’s a changing of the order in the list of the top steel producing nations with significant ramifications for the dry bulk tonne-mile picture.
Global steel production reached a new record of 174m tonnes in May, with Chinese output up 8% year-on-year at a new record 100m tonnes, and ex-China production standing up 33% year-on-year at close to the pre-Covid record.
China is now pumping out ten times’ more steel than its nearest competitor, according to Alphabulk. China has accounted for 56% of total world output so far in 2021, a record for the country.
China is now pumping out ten times’ more steel than its nearest competitor
“As steel industries outside of China start to recover from the impact of Covid, some new trends are being observed,” Alphabulk noted in its most recent weekly report.
In March and April, rest-of-the-world growth exceeded that of China for the first time in several years. Chinese growth reached 13.4% and 6.6% in April and May, while growth elsewhere hit 40% in April and 33% in May.
The post-Covid recovery is also shaking up the list of top 10 producing nations. China, India and Japan firmly retain their podium positions. However, according to Worldsteel data, the US overtook Russia in the first five months of the year, while Germany leapfrogged Turkey.
Chinese steel output is likely to taper as Beijing pressures more polluting mills to shut this year.
Analysts at Braemar ACM stated in a recent report that they expect pressure from regulators to mount in the second half of the year causing Chinese crude steel production to slow down
On the knock-on effects for iron ore imports into China, Lorentzen & Stemoco suggested in a report from last week: “This year, Chinese steel production has reached all-time-high levels in H1, but iron ore imports have been capped by insufficient supplies from Australia and Brazil, leading to record commodity prices and relatively modest inventories.”
Even if the effects of the Chinese economic stimulus packages were to ease off, analysts at Lorentzen & Stemoco suggest still-high commodity prices will encourage more supplies from the Brazilian and Australian mining companies working on accelerated production guidance.