World steel materials production is shrinking

Global steel materials production fell 2.8% to 151.5 million tons in October, according to data released by the World Steel Association on Wednesday, with production falling in all regions.

The 50 year old industry body estimates that China's crude steel production, which accounts for more than half of the world's total, fell 0.6% year-on-year in October. The decline is due to capacity cuts during China's 70th anniversary celebration.

China also limited steel materials production between winter and March, but steel materials production has grown 7.6% to 746 million tons so far this year due to a surge in production in early 2019.

US steel materials production also fell in October, down 2% year-on-year to 7.4 million tons. As the impact of anti-dumping measures gradually subsided, China's steel materials prices fell nearly 40% in the past year, so the decline in steel materials production was not significant.

The United States also imposes a 25% tariff on steel materials exports from the European Union, Canada and Mexico.

The decline in Europe was significant, at 8.7 per cent. Unlike the United States, the region has not taken any anti-dumping measures. Overcapacity in the region eventually led to a decline in the profitability of the mainland's steel materials producers. So far this year, EU crude steel materials production has fallen by 3.6% to 122 million tons.

India, the world's third-largest producer, which replaced Japan in October last year recorded a 3.4% reduction in steel materials production to 9.1 million tons, bringing the year to date growth to 3% to 84.2 million tons.

Japan's steel materials production fell nearly 5% in October, partly because of the typhoon, while so far this year it has fallen 3.9% to 75.6 million tons.