U.S. Steel Exports Increase 12.4 percent from May to June

In a recently published report, the American Institute of International Steel (AIIS) (McLean, Virginia) indicated that in June, steel exports from the U.S. increased 12.4 percent from exports in May. Steel exports in May and June stood at 628,000 tons and 706,000 tons, respectively. However, compared to exports in 2008, total steel exports this fiscal year have declined nearly 42 percent. According to a report from Industrial Info Resources (Sugar Land, TX), the year-to-date exports figure stands at 4 million tons, which is 39 percent lower than exports during the same period last year.

David Phelps, president of AIIS, has attributed the increase in June 2009 sales to a spurt in steel demand from Asian countries and other emerging economies. Phelps also indicated that while the figures were positive, they cannot be considered as indicative of the industry's trend for the remainder of the fiscal year. Phelps was optimistic that the growing steel demand in India, China and other Asian markets will help the global steel sector come out the present economic downturn.

Increased U.S. exports in June this year have been a tremendous help to trading companies and domestic steelmakers. While China and India are the top steel importers from the U.S., exports to Africa and Latin American countries also improved considerably. The month-on-month figures indicate that U.S. exports to India and China increased 75.3 percent and 21.4 percent, respectively.

According to the World Steel Association (Brussels, Belgium), global steel output in July this year was about 103.9 million tons. This figure, which is the highest monthly output so far in 2009, represented a decline of 11.1 percent from June 2008. In June this year, steel production worldwide stood at 99.7 million tons. In July, China produced 50.7 million tons, accounting for about 48 percent of the global steel production. During the same period, the U.S. produced 5 million tons, a 41.6 percent slump compared to July 2008 figures, but the highest output recorded domestically this fiscal year.

Although global production of steel was higher in July, slack demand forced steel facilities in the U.S. to operate at half of their production capacities. According to figures provided by the American Iron and Steel Institute (Washington, D.C.), steel units in the U.S. were running at a plant capacity of 53.9 percent in July.

From January to July, total global steel production was about 651.68 million tons, including:

? Asia ? 428.6 million tons

? European Union ? 72.89 million tons

? Commonwealth of Independent States (CIS) ? 52.42 million tons

? North America ? 41.94 million tons

? South America ? 19.3 million tons

? Rest of Europe ? 19.3 million tons

? Middle East ? 15.67 million tons

? Africa ? 9.67 million tons

? Australia ? 8.33 million tons

? New Zealand ? 2.77 million tons

The global steel forecast report published by MEPS (International) Limited (Sheffield, England) states that in 2009, world steel output will be about 1.165 billion tons, a decline of 12 percent from the previous fiscal year. The study forecasts that the slowly recovering automobile industry and the real estate and construction sector in Asia and other emerging economies will help fuel steel demand. Industry experts indicate that it is a good sign that steel inventories in the automotive sector have decreased from a supply of 120 days to a 40-day supply.

Many closed production facilities in the E.U. are expected to re-commence operations to help fulfill demand from the global automotive sector. The rest of Europe is also expected to steadily recover, with the
Turkish steel industry in the driver's seat. The report predicts that many steel companies in the CIS nations are expected to take advantage of foreign exchange rates and produce semi-finished steel goods for export. North America and South America will see positive growth in the second half of the year, while the South African steel industry is expected to witness renewed activity from new projects in the residential construction sector.

The report forecasts that Asian steel production in 2009 will be about 743.5 million tons, with China contributing 516 million tons and Japan producing about 88 million tons. The E.U., CIS nations, and rest of Europe are expected to produce 141.5 million tons, 93 million tons, and 28.6 million tons, respectively. This fiscal year, North America, Africa, South America, Australia and New Zealand, and the Middle East are expected to contribute 82.7 million tons, 15.5 million tons, 36.3 million tons, 5.7 million tons, and 18.2 million tons, respectively.