Global crude steel output remained elevated in May, coming within a whisker of setting another record high.
According to the World Steel Association (worldsteel), 143.3 million tonnes were produced during the month, up from 142.1 million tonnes in April.
That left production up 2% from a year earlier, and came close to topping the current record high of 143.5 million tonnes set in March this year.
China, the world’s largest producer by some margin, saw output slow to 72.3 million tonnes, down fractionally on the 72.8 million tonnes produced in April.
Despite the small moderation, it still left output up 1.8% on the levels of a year earlier.
Outside of China, output in other nation’s rose to 71.1 million tonnes, up from 69.3 million tonnes in April. That was an increase of 2.2% from the levels reported in May 2016.
This chart from worldsteel shows global production over the past 18 months, along with the annual percentage change in output levels.
Annual growth rates have slowed in recent months due to a higher base effect in 2016, rather than a slowdown in production.
China has also produced more steel than the rest of the world combined for three consecutive months.
While the recent acceleration in global steel production has done little to help prices for iron ore and coking coal, Vivek Dhar, mining and energy analyst at the Commonwealth Bank, says it will help to bolster demand for Australia’s largest commodity exports in the period ahead.
“Australia’s exports to China will likely build again this year as Chinese steel output expands to accommodate stronger domestic demand,” he says. “China’s steel consumption will likely grow 2-3% as policymakers look to backstop growth with infrastructure investment ahead of elections later this year.”
He says that Australia’s iron ore exports to China will likely increase as high cost Chinese production, which accounts for around 15% of China’s iron ore needs, is replaced by low cost imports.