Global steel production is surging in 2017
The price of iron ore reached a 30-month high on Monday, while coking coal is trading 80% higher than this time last year. The rally in the steelmaking raw materials may gain further momentum this year as global steel production kicks off the year on a strong footing.
World Steel Association data released on Tuesday, showed a 7% jump in global steel output in January to 136.5 million tonnes.
The 50-year old industry body estimates that steel production in China, which is responsible for just shy of half the global total rose 7.4% year on year, but was fairly flat on a month-on-month basis.
What makes Chinese output particularly strong is that the country's extended Lunar New Year holiday fell in January this year.
World number three producer India recorded the biggest gain of the major producing countries, with output increasing by 12% year-on-year. India's infrastructure push should keep blast furnaces on the subcontinent humming throughout this.
Japanese output declined slightly last year, but the world's number two producer is having a strong start to 2017 with an increase of 2.7% compared to January last year and 3.3% compared to the prior month.
US output also rose in January following an annual decline in 2016, surging 6.5% in year on year terms. The strong numbers reflect the impact of anti-dumping measures against China spurring domestic output and optimism about President Donald Trump’s infrastructure plans.
Some of the strongest growth was recorded in Russia and Ukraine, the world's fifth and tenth largest producers of steel. Russian output was 11.6% higher than January 2016, while Ukraine crude steel production rose 8.5%.