Decoupling yields split steel personality
Photo by Recycling Today staff

Decoupling yields split steel personality

Global and national steel output figures reveal ongoing decline in China while much of the rest of the world chugs along.

February 23, 2022

Recent global steel output statistics for this January and weekly figures in the United States seem to show a sharp divide between steelmaking momentum in the U.S. and a sharply contrasted slowdown in China.

January steel production figures released by the Brussels-based World Steel Association (Worldsteel) portray an 11.2 percent decline in steel output in the People’s Republic of China this January compared with January 2021. That contrasts with a 4.2 percent year-on-year increase in the U.S. and a 4.7 percent increase in India for this January.

The healthy markets in the U.S. and India are good news for ferrous scrap recyclers in North America. While China may no longer be a big buyer of exported scrap, Turkish mills are—and that nation’s output dropped 7.8 percent this January compared with one year ago.

Turkey has been wrestling with volatility in the value of its currency and other fiscal policies deemed questionable by investors in other parts of the world. China, meanwhile, appears to be facing a sharp contraction in the construction of apartment towers. That sector consumes a double-digit percentage of the nation’s steel output and is responsible for as much as 25 percent of China’s gross domestic product, by some estimates.

The overseas turmoil did not affect steel production in the U.S. in January and seems not to have done so in February either. The Washington-based American Iron & Steel Institute (AISI) reports that in the week ending Feb. 19 domestic raw steel production was 1.76 million tons with mills operating at an 80.1 capability utilization (capacity) rate.

That figure represents about a 24,000-ton gain on output during the identical week in 2021, when the mill capacity rate was 76.8 percent. According to AISI, domestic steel output in the most recently completed week also is up 0.3 percent from the previous week, which ended Feb. 12.

Steelmakers in the U.S. continue to report profitable results, with one CEO, David B. Burritt of Pittsburgh-based U. S. Steel, recently declaring, “Our balance sheet has been transformed, record cash significantly de-risks strategy execution and our capital allocation priorities have enhanced direct stockholder returns.”