China Nears 350 MMT in Steel for 2005

As expected, 2005 marked another year of amazing growth in Chinese steelmaking, as the nation accounted for nearly 31 percent of the world’s steel production last year, according to the International Iron and Steel Institute (IISI), which released its year-end figures in mid-January.

That 31 percent figure was up from 26.3 percent in 2004, but talk of overcapacity in China is being broached. “During 2005 it became clear that Chinese production was outstripping demand, and the market was over-supplied,” the IISI states in its 2005 summary news release.

The IISI figures show China producing 349.4 million metric tons (mmt) of crude steel in 2005. World crude steel production increased by 5.9 percent last year, to reach a total of 1,129 million metric tons (mmt). China accounted for most of the increase.

The Brussels-based organization credited steelmakers in the U.S. with lining up production and demand more accurately by reducing their combined steel production by 5.3 percent.

Japan’s overall steel production remained flat while “India’s strong economic growth provided the backdrop for a 16.7 percent growth in the country’s steel output,” according to the IISI.

In Europe, with its prevalence of electric arc furnace steelmaking, production was down in 2005 by 3.6 percent compared to the year before, as producers curtailed production and relied on built-up inventories.

For December alone, total world crude steel production was 96 mmt, an increase of 3.8 percent compared to December 2004. Chinese production was 32 mmt for the month, an increase of 16.2 percent compared to December 2004.