Small Change, Big Result in 2020 Steel Tonnage

Global steel production totaled 1.864 billion metric tons during 2020, an unexpected result considering the complex of factors weighing against steel demand, namely the ongoing weakness in industrial and construction markets, and the sudden drop in industrial activity in most developed regions due to the COVID-19 pandemic. The 2020 total – reported by the World Steel Assn. which tracks raw-steel production in 64 countries – is merely -0.9% less than the 2019 result.

The World Steel Assn. data concerns "raw” carbon steel, the product of basic-oxygen or electric arc furnaces and cast into semi-finished forms like billets for bar and rod products; slabs for flat products; or blooms, for beam and pipe products. Specialty and stainless steel are accounted separately.

In its October 2020 Short-term Outlook report, World Steel forecast that global steel demand would drop by -2.4% year-over-year for 2020, to 1.725 billion metric tons. For 2021, the group foresees steel demand then recovering 4.1% year-over-year, to 1.795 billion metric tons.

But the remarkable development for 2020 is the continued expansion of raw-steel output in China, which accounted for 56.5% of all the raw steel produced worldwide last year. China produced 1.053 billion metric tons of raw steel from January through December 2020, 5.2% (or about 53 million metric tons) more than during 2019.

China’s expanding lead on the global market is apparently at the expense of other leading steelmaking nations – specifically India, Japan, South Korea, and the U.S., all of which decreased year-over-year output in 2020. Russia, which now ranks fourth among the world’s top steelmaking nations, managed a small increase (+2.6%, or about 1.8 million metric tons) in its year-over-year output.

Also, the Chinese industry’s expansion continues despite steady reports of mandates from the nation’s economic planners to control the glut of steel products in the domestic market, which followed other mandates to modernize steelmaking production to control operating costs and environmental impacts.

Outside China the market forces had more predictable effects, as World Steel documented:

India’s raw steel production for 2020 was 99.6 million metric tons, -10.6% versus 2019.

Japan produced 83.2 million metric tons in 2020, -16.2%. South Korea produced 67.1 million metric tons, -6.0% from 2019.

Russia’s final tonnage for 2020 is estimated to have been 73.4 million metric tons, up 2.6% over 2019.

In the EU (28 nations) total raw steel output fell to 138.8 million metric in 2020, a decrease of -11.8% from 2019. Germany’s year-over-year output was down -10.0%, Italy -12.9%, France -19.8%, and Spain -19.5%.

Raw-steel production in the United States totaled 72.7 million metric tons (80.14 million short tons) in 2020, down -17.2% versus 2019.