The global production for steel decreased by 3.3% in Q4 2021 as compared to Q3 2021, and also declined by 0.5% from Q4 2020. Global steel production fell in Q4 2021 due to decline in steel production in APAC, as APAC contributes more than 70% of the global steel production. China, the world’s largest steel making nation, produced 227.1 Mt of crude steel in Q4 2021, a decrease of 7% compared to Q3 2021. Steel production declined in China due to rising production costs amid a power crunch and surging prices of downstream materials, especially coal. China continues to reduce its steel output to meet its carbon neutrality target. Globally, the price of steel decreased by 4.9% in Q4 2021, as compared to Q3 2021.
In Q1 2022, the global demand for steel is expected to decrease further by 1.3% from Q4 2021 due to energy shortage and higher cost of energy. The price of steel is forecasted to decrease by 3.3% in Q1 2022 vs. Q4 2021. The figure below depicts the change in demand and change in the price of steel over the past five quarters and one forecast quarter.
Source: World Steel Association, Lucintel
Figure: Global Quarterly Steel Production and Price Trends
The North American steel production witnessed decline by 2% in Q4 2021 as compared to Q3 2021, and it is expected to decline in Q1 2022 as well. Although, housing starts in the US increased by 5.3% during Q4 2021 from Q3 2021, the steel production decreased in Q4 2021 due to power crunch. The steel demand in North America expected to slow down due to global supply chain issues. .
In terms of steel production in the European region, slightly grew by 0.6% in Q4 2021 as compared to Q3 2021, due to increase in demand of various end use industries, including transportation and industrial applications. European steel demand is expected to decrease in Q1 2022 because of sharp rises in carbon and energy costs to change European steel output. In terms of price, the European region registered a decrease in price of crude steel during Q4 2021 as compared to Q3 2021.
In Q4 2021, production of crude steel in the Asian region declined by 5% as compared to Q3 2021, and it is expected to decrease further in Q1 2022. Countries like China, India, and Japan produced around 281 million metric tons of crude steel during Q4 2021, a decrease by 5% from the Q3 of 2021. The demand for steel decreased due to the rising production costs and surging prices of downstream materials, while the price of steel in the same period declined due to power issues and falling steel demand.
In RoW, steel production increased by 2.1% in Q4 2021 as compared to Q3 2021 but it is expected to decrease in Q1 2022. The steel demand increased in ROW due to increase in industrial activities and increase in light vehicle sales in Q4 2021. It is expected to decrease in next quarter caused by economic deceleration, full inventories and falling demand from end-users.
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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