Global economic uncertainty, trade tensions and a recent slowdown in automotive production have resulted in a more subdued outlook for global steel production, according to Australia’s Department of Industry.
The forecast crude steel output is 1,817mn mt in 2020 from 1,828mn in 2019. In 2018, global crude steel output was at 1,855mn mt.
China’s steel output is forecast at 917mn mt in 2020 from 928mn mt this year. Apart from trade tensions, tighter environmental regulations could reduce Chinese steel production. China has announced new air quality targets, with concentrations of particles below 2.5 microns to fall by 4pc through the year. Liuzhou Steel and Chanjiang Steel are set to close facilities by 2021, several other facilities including mills in Hebei Province are expected to reduce output by 14mn mt. In Shanxi province, steel output is set to fall by 1.75mn mt amid modest winter production curbs.
Crude steel output in India is forecast at 103mn mt in 2020 from 102mn mt this year. Growth in emerging Asia is dominated by India and Vietnam, who have unveiled detailed plans to expand their steel industries. Indian production faces an array of challenges which include tight margins, ample international supply, domestic economic slowdown and global trade tensions. Near-term Indian production may also be disrupted by the expiry of 232 mining leases in March 2020.
In Japan, the steel outlook remains relatively modest, largely due to a decline in manufacturing growth during 2019. However, recent stimulus announcements may provide some upside in 2020. Japanese crude steel forecast is at 123mn mt in 2020 from 115mn mt this year.
In Europe, liquidity issues and profitability are likely to bring production down by 3pc. On weak outlook, Tata Steel announced 3,000 jobs cuts in Europe. British Steel went into liquidation in May and subsequent takeover by the Chinese-owned Jingye Group, recently.
Steel production in the US has lost momentum in recent months, reflecting the impact of lower global automotive production and trade tensions. The US crude steel output is forecast at 85mn mt in 2020 from 87mn mt this year.