US
Production of crude steel in the United States declined in June, 2020 compared to May 2020 on a month-over-month basis. On year-over-year basis also, it declined significantly from June 2019 benchmark. Steel output basically declined due to shutdowns, restricted manufacturing activities, and disrupted supply chains due to the global pandemic caused by COVID-19 outbreak. Further drop in demand for steel in the United States is expected, as the recession of manufacturing activities hit the bottom in the second quarter of 2020. Results from flat rolled steel segment improved in June with improvement in automotive and energy end use markets. Residential construction activities are impaired due to rising unemployment and low income. Non-residential construction activities, including continuous decline in rig counts and oil prices, significantly affected the demand for welded and seamless steel in June 2020.
Asia
The Asian region comprising of countries, like China, India, Japan, South Korea, Pakistan, Taiwan, Thailand, and Vietnam, produced around 642 million metric tons of crude steel in the first half of 2020, which is 2.3% less on year-over-year basis. Among all the Asian countries, production of steel in China and Vietnam increased in June 2020 when compared to June 2019. In terms of price, June registered a level of five month high, supported by stronger demand from China. In the coming months also, China is set to increase its infrastructure construction to offset the negative impact of the coronavirus pandemic on its economy, which gives hope of improvement in the steel market. In contrast to China, India witnessed 60%-80% fall in demand for steel components after nationwide lockdown was imposed. However, there has been increase in steel demand in India since June 2020, which has provided some relief to domestic blast furnace players. Ease in lockdowns and starting manufacturing activities as strategies to revamp the economy will increase the demand for steel in the coming months.
Europe
In terms of production of steel in the European region, Germany, Italy, France, and Spain each saw a decline in June 2020 when compared on year-over-year basis. As much as 18.9 million tons of steelmaking capacity was taken offline in Europe during the market slump caused by the pandemic, this is more than any other region. Demand for steel was also hit hard due to the COVID-19 pandemic in the European region, as the automotive sector was completely shut down. In June 2020, registrations for passenger cars in automotive industry declined by 25%. The domestic demand for steel is still weak; European mills have been starting slowly, but there is a lack confidence to regain production on full swing anytime soon.
The price and demand analysis on above is published monthly for various regions. Lucintel analysts collect supply, demand and price data from various suppliers and consumers on a monthly basis and also analyzes news on supply and demand issues, production, and price trends. This allows Lucintel to publish unbiased assessments on price and demand movements to help you make confident business decisions on your negotiation or business issues.
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