Global steel production increased both year-on-year and month-on-month in September 2020. According to the World Steel Association, the total output of steel reached 156.359 million tonnes, which is 2.9% above the September 2019 result and 0.1% above the previous month's result, according to issue 1396 of AK&M Information Agency's "RUSSIAN INDUSTRIES: PRODUCTION, FINANCE, SECURITIES. Ferrous and Non-ferrous Metallurgy" monthly paper dated October 28, 2020.
A total of 1.347 billion tonnes of steel were produced in the first nine months of 2020, which is 3.2% below the result achieved in January-September 2019. It should be noted that China accounted for 58% of the total production (against 57.7% in July), the contribution of this country to the global steelmaking has been growing continuously since April 2020. The average daily steel production in China reached 3.085 million tonnes in September hitting a new historic high for the industry.
Russia increased steel production by 0.8% to 5.86 million tonnes in September against a year earlier, staying the world's fifth largest steel producer and coming very close to the fourth position (according to the WSA). For 9 months of 2020, the steel output in Russia decreased by 1.4% to 53.269 million tonnes (-19.2% in the US, -19.1% in Japan, -7.5% in South Korea, -16.5% in India), while China increased production by 4.5%.
In October, the European Commission started a second expiry review of the anti-dumping measures applicable to imports of wire rod from China following a request from the European Steel Association. With effect from October 2020, the EU has imposed duties on imports of hot-rolled steel and stainless steel plates from China, Indonesia and Taiwan, as an investigation found that they had been sold at understated prices. The duties are set equal to 19% for imports from China, up to 17.3% for products from Indonesia, up to 7.5% for stainless steel from Taiwan.
The second COVID-19 wave which arrived in the fall of 2020 brings about the risk of lockdowns, which may trigger another steel consumption crisis and production curtailment – and this when the 3Q performance results of the Russian ferrous metal producers suggest a modest situation improvement in the sector. However, demand for steel products in the Russian market started to weaken again in early autumn. The key export market for Russian steelmakers is currently Southeast Asia, which has recovered from the pandemic faster than the rest of the world.
One of the key factors influencing the domestic rolled steel market was a slump in the ruble exchange rate. The weak ruble has tilted the balance strongly towards exports. It also turned out that Russian steel companies can increase export sales to offset any decline in domestic consumption. In addition, the cheap ruble enabled Russian companies to increase supplies of galvanized steel to Europe. The supply contraction pushed prices in the domestic market upwards.
An in-depth review of the trends and performance results of the ferrous and non-ferrous metallurgy market in September 2020 is provided in issue 1396 of AK&M Information Agency's "RUSSIAN INDUSTRIES: PRODUCTION, FINANCE, SECURITIES. Ferrous and Non-ferrous Metallurgy" monthly paper.
