Global steel production
Previously, we explored the Eurozone’s steel production data. In this part of the series, we’ll look at global steel production. The figures don’t paint a rosy picture of the steel industry. Global (ACWI) steel production declined 2.1% year-over-year in May.
The World Steel Association (or WSA) releases global steel production data on a monthly basis. The WSA is a global body that represents 170 major steel producers. Members of the WSA represent almost 85% of global steel production. Data released by the WSA are keenly analyzed by investors in steel companies.
The above graph shows monthly global steel production over the last year. On a year-to-date basis, global steel production has gone down 1.9%. Production has registered a decline for five consecutive months. Steel production figures point to a slowdown in the global steel industry, which is led largely by China.
China’s steel production
China’s steel production has fallen 1.6% year-to-date. North American steel production has seen the deepest cut among major steel-producing countries. In the first five months of the current year, steel production has declined 7.2% in North America.
Lower steel production in North America impacts steel companies operating in the region. Nucor (NUE) and Steel Dynamics (STLD) have seen lower 2Q15 earnings on higher steel imports. Together, these companies form 8.2% of the SPDR S&P Metals and Mining ETF (XME). Carpenter Technology (CRS) forms 3.6% of XME.
In the next part of this series, we’ll see how the steel industry in India is shaping up.