LONDON (Reuters) - Global crude steel production rose four percent in March as mills in top producer China ramped up output after winter restrictions were lifted and as U.S. producers took advantage of import tariffs to churn out more metal.
The steel industry, worth about $900 billion a year, is seen as a gauge of the world’s economic health.
Global crude steel production rose to 148 million tonnes in March, figures from the World Steel Association (worldsteel) showed on Wednesday.
Crude steel output from China, which produces about half the world’s steel, rose to 74.0 million tonnes, up 4.5 percent from March 2017 after winter restrictions to combat smog were lifted mid-March.
“(The) rebound in steel demand post Chinese New Year was slower than expected, but... we are seeing (a) healthy course of demand and reducing steel inventories,” Greg Lilleyman, Chief Operating Officer at Fortescue Metals Group, said on an earnings call with reporters and analysts.
The worldsteel data showed India, which this year overtook Japan to become the world’s second largest steel producer, boosted output by 5.3 percent in March, while Japan boosted output by 2.2 percent.
In the U.S., steel output rose 5.3 percent to 7.3 million tonnes as imports fell after President Donald last month slapped hefty duties on steel aimed at dissuading China from exporting its excess metal onto global markets.
“The Steel Executives at our recent dinner left us thinking (hot rolled coil) prices may stay above $800/t until the Fall, import volumes may stay low and take longer to arrive, and low U.S. inventories and robust demand may extend the up cycle,” said Morgan Stanley in a note to clients.
Earlier this month, worldsteel raised its forecast for 2018 global steel demand growth to 1.8 percent from 1.6 percent previously, citing favorable global economic momentum, though it expects Chinese steel demand to remain flat this year.
This is as economic growth in the world’s second largest economy decelerates and the government continues to steer the country away from investment-led to consumption-led growth.
Global steel equity values have more than doubled since hitting 12-year lows in early 2016 in the worst of the steel sector crisis. Worldsteel represents more than 160 steelmakers accounting for 85 percent of global output.
Reporting by Maytaal Angel; Editing by Elaine Hardcastle