Low demand and high energy costs hit steel production

World steel production fell 6.1 percent in January due to reduced demand in China and higher energy prices in Europe. Steel production decreased by 6.8 percent in EU countries and 7.8 percent in Turkey.

According to the data released by the World Steel Association, global steel production fell to 155 million tons in January after the 11.2 percent decline in China, the world's largest steel producer and consumer.

Decreased in China, but recovery is expected
Demand has declined in China due to problems in the real estate sector and the government's attempts to reduce air pollution during the winter Olympics. "We don't think China's steel production will recover strongly anytime soon, as we expect demand for structural steel to decline this year," said Luke Nickels, commodity economist at Capital Economics.

In the EU, steel demand is expected to decline sharply this year as supply chain bottlenecks and rising energy prices put pressure on industrial activities, especially in the automotive sector.

On the other hand, steel production in India increased by 4.7 percent, in the USA by 4.2 percent and in Russia by 3.3 percent.