Hard to imagine, but with Chinese steel capacity forging ahead with growth, we've recently hit the "15kg of steel for every person in the world" mark... per month. Clarksons shipping intelligence explains both this and the virtuous cycle for shipping which the growth of Chinese steel capacity entails.
How much is 15 kilos? Well it’s the checked suitcase allowance on some budget airlines and it’s also the steel production in July for every man, woman and child on earth. Yes, world steel production has finally broken the magic 100mt a month barrier and it’s an awful lot of steel. ...
Rapid growth of steel capacity.
Until 1999 the world steel industry was smelting around 64mt tons a month, with not much growth - just the occasional business cycle bump. Then China kicked in and added 25mt by 2006 which, along with 11mt from others (2mt from the EU, 3mt from Asia, 3mt from CIS and 3mt from the rest of the world) gets us to 100mt. But what are we doing with this extra suitcase of steel?
Slowing Chinese growth means higher Chinese steel exports.
Until recently the answer was mainly buildings, infrastructure, motor cars and ships. But recently the big growth area for China has been exports. But recently the big growth area for China has been exports. ... This year’s growth is not building the new China, it’s building new export markets.
Iron ore shipped in, steel shipped out... great for shipping demand
This is good for the shipping industry because most of the export growth is heading to Europe and the US. Flat rolled products exports to the EU trebled from 174,000t in January to 600,000t in June. That’s 15 Handy-max loads, or a ship every two days. Given the long voyage to the EU this must be soaking up lots of tonnage in the Asian area. Exports to the US are on the same track ...
For shipping China steel is in a virtuous circle. They suck in the ore and pump it out again as steel exports, both on long voyages. Which brings us back to the starting point. Do economies out side China really want an extra kilo?
Just how massive could Chinese exports of steel be? At 5 million tons per month already.
5mt a month is 60mt a year, close to half the output of Japan or the European Union.
What seems like small incremental exports for China are huge internationally. Slowing growth in China would of course just turn into a flood of steel abroad as China increasingly goes from importer to exporter.
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