Asia, Europe drive global steel output fall in May

World crude steel production dropped by 5.1pc to 161.6mn t on the year in May, driven by weakness in the Asian and European steel sectors.

Production in Asia and Oceania fell by 6pc to 119.5mn t in May compared with the same period in the previous year, according to data from international steel industry organisation Worldsteel. India posted positive results, with steel output in the country rising by 4.1pc to 11.2mn t on the year in May, but China and Japan saw negative growth.

In China, production fell by 7.3pc to 90.1mn t in May. A sluggish real estate sector and weak demand led to declining steel prices in China, leading producers to cut output. Japanese steel output fell by 5.2pc to 7.6mn t in May. The country's automobile sector showed signs of strengthening, but this was outweighed by poor construction demand. Additionally, several major Japanese steel producers shifted focus to lower-volume, higher-quality products, further contributing to the production decline.

In the EU, output dropped by 11pc to 11.6mn t on the year in May, reflecting the results of low demand in key markets such as Germany.

Of the top 10 steel-producing countries, Turkey saw the largest drop in percentage terms, with its output declining by 10pc to 2.9mn t in May. Turkish producers struggled with low demand brought on by uncertainty and pessimism regarding Turkey's macroeconomic situation, especially in advance of the May elections. Mills also found themselves under pressure from aggressively-priced Chinese imports, which led them to reduce capacity utilisation.

Russia and Iran had the strongest growth in percentage terms out of the top 10 steel-producing countries. In Russia, output grew by 8.8pc to an estimated 6.8mn t, and output in Iran also rose by 8.8pc to 3.3mn t.

By Miriam Pollock