Global Crude Steel Production Softens in August Amid Weak Chinese Demand

Metals – Crude steel production softens

The latest data from the World Steel Association show that global crude steel production softened further to 152.6mt in August compared to 158.6mt in July. Crude steel production is now at its lowest level since February as demand from China remains weak. Compared to year-ago levels, crude steel production increased by 2.2% year-on-year with China output increasing by 3.2% YoY to 86.4mt, while the Rest of the World’s production increased by 0.7% YoY to 66.3mt. Cumulative global crude steel production increased by 0.2% YoY to 1.26bn tonnes over the first eight months of the year.

For the year, major gains come from China and India with production increasing by 2.6% YoY to 712.9mt and 10.5% YoY to 92.2mt respectively. On the other hand, EU production dropped by 9.8% YoY to 85.7mt over the first eight months of the year.

Gold prices softened to US$1,915/oz yesterday as treasury yields continue to move higher on expectations of ‘higher for longer’ Fed policy rates. The Fed’s latest dot plot shows that the tightening cycle may not be over yet and that the economic data could continue to be a major driver of future policy decisions. US 10Y treasury yields have increased to a fresh five-year high and broken above 4.5%, which continues to weigh on gold prices.