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Output Growth of Steel Slows Down in Novmber

Output Growth of Steel Slows Down in Novmber

Along with Chinese top steel producers’ new rules against pollution, and the actions respond to the weaker prices and excess supply of the industry, the production of steel output growth reached the slowest rate in November.

According to the steel producers association Worldsteel on Friday, world steel output increased by 3.6% while China is reported by 4.2%. Since December 2012, it was the lowest year-on-year growth for China.

"A fall in global output growth in November reflects lukewarm finished steel demand, though some pockets of relative strength have been seen: the construction sector in the U.S. and Japan's manufacturing industry," said Chris Houlden, an analyst at steel consultancy CRU.

Chinese production had hit year-on-year growth levels as high as 12.8 percent in August this year but the country is grappling with an estimated overcapacity of 200 million to 300 million tonnes.

China said recently it might shut down some steel mills as it steps up its fight against air pollution but many in the industry think it will take years before it delivers meaningful cuts.

As the steel markets enter a seasonally slow period for demand, stock levels could rapidly build forcing steelmakers in China to pare crude output in the coming months, according to Sucden metals analyst Kashaan Kamal.