Global steel output slides 10% y/y in Nov due to China slump

FILE PHOTO: Employees work at a factory of Dongbei Special Steel Group Co. Ltd. in Dalian, Liaoning province March 16, 2015. REUTERS/China Daily

By Eric Onstad

LONDON (Reuters) - Global steel output slid 10% last month year-on-year due to weakness in top producer China, which analysts said is likely to persist in coming months due to a troubled property sector.

Worldwide crude steel production dropped to 143.3 million tonnes in November from a year earlier but Chinese levels tumbled by 22% to 69.3 million tonnes, World Steel Association data showed on Wednesday.

Compared to last month, Chinese output slipped 3.2%, showing that production may be stabilising at lower levels, Caroline Bain, chief commodities economist at Capital Economics, said in a note.

"While power rationing and efforts to curb emissions explain much of the weakness in China’s steel production recently, we think that demand has also been lacklustre given the slowdown in China’s construction and property sectors," she said.

"Looking ahead, we expect this weakness to persist, which will act as a lid on any plans to bring steel capacity back online."

Outside of China, production rose, with Japan climbing 10.7% year on year, the United States gaining 13.8% and Russian advancing 9.4%.

Europe's biggest producer Germany, however, slipped 0.3% and high regional power prices may be dampening the sector, Bain said. "If this is the case, EU production could see a more pronounced downturn this winter."

(Reporting by Eric Onstad; Editing by Jon Boyle, Kirsten Donovan)

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