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Jan 23, 2012

SA steel production falls 12.7%, world output up 6.8%

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South Africa’s steel output fell by 12.7% year-on-year to 6.7-million tons last year, while global production surged 6.8% to 1.53-billion tons, the World Steel Association (worldsteel) reported on Monday.

South African Iron and Steel Institute (Saisi) information specialist Abrie Audie noted that the worldsteel ‘2011 world crude steel production’ report was based on estimates, but said it was likely that the country’s steel production was down by a significant margin.

The country’s steel mills experienced significant downtime during 2011.

ArcelorMittal South Africa, a unit of the world's biggest steelmaker, only resumed full production at its Newcastle plant on December 9, after being hit by a furnace failure last year. The furnace failure had impacted an already subdued outlook for the company and ArcelorMittal had to source steel from external sources to minimise the impact on its customers.

South Africa's second-largest steel producer, Evraz Highveld, also experienced significant downtime while making improvements at its plant, adding to the national decline in yearly steel production, Audie stated.

“One should also take into consideration that since the Competition Commission launched an investigation into the local steel industry in July 2008, some of Saisi’s members stopped the regular reporting of their production figures,” he added.

Meanwhile, the worldsteel production figures showed significant growth in Turkey, South Korea and Italy. Of all the significant steel producers, only Japan and Spain showed a decline in yearly production.

Asia’s 2011 production was 988.2-million tons of crude steel, an increase of 7.9% compared to 2010. The region’s share of world steel production increased slightly from 64.0% in 2010, to 64.7% in 2011.

China’s crude steel production in 2011 reached 695.5-million tons, an increase of 8.9% on 2010. China’s share of world crude steel production increased from 44.7% in 2010, to 45.5% in 2011. Japan produced 107.6-million tons in 2011, a 1.8% decrease from 2010. In 2011, South Korea’s crude steel production was 68.5-million tons, a 16.2% increase compared with 2010.

The European Union recorded an increase of 2.8% compared with 2010, producing 177.4-million tons of crude steel last year. Spain produced 15.6-million tons of crude steel in 2011, a 4.6% decrease on 2010, while Italy produced 28.7- million tons in 2011, an 11.3% increase over 2010.

Last year, crude steel production in North America was 118.9-million tons, an increase of 6.8% on 2010. The US produced 86.2-million tons of crude steel, 7.1% higher than 2010.

The Commonwealth of Independent States showed an increase of 4% in 2011, producing 112.6-million tons of crude steel. Russia produced 68.7-million tons of crude steel, a 2.7% increase on 2010 and Ukraine recorded an increase of 5.7%, with a year-end figure of 35.3-million tons.

The yearly crude steel production for South America was 48.4-million tons in 2011, an increase of 10.2% on 2010. Brazil produced 35.2-million tons in 2011, 6.8% higher than 2010.

In December, world crude steel production for the 64 countries reporting to worldsteel was 117.1-million tons, an increase of 1.7% compared with December 2010.

The crude steel capacity utilisation ratio of the 64 countries in December 2011 declined slightly to 71.7%, compared with 73.3% in November 2011. Compared with December 2010, the utilisation ratio in December is -2.1% points lower.

Last week, Ernst & Young said steelmakers globally would be under pressure to remain profitable in 2012 as the sector faced significant over capacity. It said rationalisation would be required, but noted that political pressures would prevent downscaling as governments were under pressure to protect jobs.

Edited by: Mariaan Webb
Creamer Media Senior Researcher and Deputy Editor Online
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