The global steel production during September 2008 declined 3.2% to 108.4 Million tonnes due to fear of economic recession, weak demand, rising stockpiles and slowdown in Chinese housing industry.
Global crude steel production in 66 member countries of the World Steel Association, formerly known as the International Iron and Steel Institute (IISI), shrunk 3.2% to 108.4 Million tonnes in the month of September 2008.
The global crude steel production witnessed MAT (Moving Annual Total) growth at 4.7% in September 2008 from 5.6% in August 2008. The two emerging markets - Brazil and Russia - recorded an increase of 5% and 7% respectively in steel production, but EU witnessed a modicum rise of less than 1% only. Production in North America remained flat. Moreover, production in China, unarguably the world’s steel largest producer, dropped a significant 9.1% to 39.6 Million tonnes. But still, the global output in the initial nine months managed to score a 4.6% hike, reaching 1.035 Billion tonnes.
The sharp decline in the global steel production is accredited to gloomy market conditions, which have raised fears of economic recession. In view of economic recession, industry analysts have warned that the steel industry will suffer as the demand depends upon activities in construction and machinery segments, and both the segments are facing investment problems.
The Chinese steel industry is trying to reduce the impact of global financial crisis on world steel industry. In fact, the demand for steel fell on account of slowdown in the Chinese housing market and passing of the 2008 Beijing Olympic Games that led to massive construction. Also, some leading Chinese steel mills have cut down steel production which resulted in piling of iron ore at dockyards.
According to a Research Analyst at RNCOS, “The global steel industry production declined in the backdrop of financial crisis. Thus, steel producers across the world are cutting down their production in wake of falling prices. Moreover, the production of steel is likely to be sluggish as major steel firms worldwide have huge stock available.”
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