Global steel production rose 6.6% in October compared to output a year ago, with China again setting the pace for overall output, World Steel Association data showed on November 20.
Steel production is a key indicator of activity in global industry and iron ore, the key steelmaking ingredient, is the second most-traded commodity around the world behind crude oil.
China, which produces almost as much steel as the rest of the world combined, recorded growth of 9.2% in October to 65.1 million tonnes compared to last year, while global number two Japan’s production was up 7.7% to 9.5 million tonnes.
World Steel Association data also showed healthy growth outside Asia with U.S. production jumping 8.7% to 7.4 million tonnes and European Union production up 4%, led by a surprising 23.9% output boost in Spain and a 17.9% increase in Britain.
The liberalization of China’s hukou system is expected to be a main driver of a fresh wave of urbanization inside the country of 1.3 billion people.
China’s Iron and Steel Association released data November 19 showing the country’s daily crude steel output for the first 10 days of November rose a further 2.18% from the already torrid pace of late October.
The daily run rate for Chinese blast furnaces is now 2.144 million tonnes and the increase in output follows a rally in steel prices prompted by reforms announced at the Chinese Congress Third Plenum policy meetings.
Amid other market-friendly reforms, the liberalization of China’s hukou system is expected to be a main driver of a fresh wave of urbanization inside the country of 1.3 billion people.
Under China’s 4,000-year-old hukou system, people are registered in their town of birth and can only access government services including education, housing and welfare there.
This led to millions of migrant labourers and especially their children in large cities becoming an underclass without ways to put down roots.
The strength in the global steel industry has offset some of the price pressures brought on by increased supply of the main raw materials for blast furnaces.
The price of iron ore has held up well despite record-setting exports from Australia and a looming flood of new supply through 2017.
The benchmark CFR import price of 62% iron ore fines at the Chinese port of Tianjin climbed to $136.40 a tonne on November 20, up 23% from its lows for the year struck at the end of May, according to data provided by Steel Index.
The price of metallurgical coal has recovered from steep declines during the first half of 2013 but remains relatively soft.
Benchmark Australian premium coking coal was changing hands for $143 a tonne on November 20, up from multi-year lows of $131 struck in early July, but down 2.5% so far in November.
Reprinted by permission of MINING.com