SA steel production drops 3.5% year on year in May
SA’s steel production fell by 3.5% year on year in May to 561,000 tonnes, according to the World Steel Association.
Steel production is an important indicator of a country’s economic health, so that SA’s fell by only 0.8% in the first five months of 2017, after a 4.2% drop last year, is good news. It means overall economic growth should be above last year’s 0.3% increase. SA, however, lags global growth as global steel production increased by 4.7% in first five months of the year.
The recovery in steel production indicates that the increase in global economic growth forecasts for 2017 by the International Monetary Fund and the World Bank have substance, based on evidence, such as the highest annual growth in world trade volumes since April 2011 being recorded in March 2017.
Steel demand in the emerging and developing economies, excluding China, which accounts for 30% of the world total, is expected to grow by 4% in 2017 according to the World Steel Association forecasts. It is then expected to increase by a further 4.9% in 2018, which should benefit the South African steel and iron ore industry.
Bulk exports out of Saldanha, which are mostly iron ore, jumped by 24.2% in the first quarter of 2017 to 17.4-million tonnes. In May, Chinese steel production grew by 1.8% to 72.8-million tonnes.