A gradual decline in capacity utilization of global steel mills has been visible in 2015, with November’s number coming in at 66.9% compared with January’s 69.5%, according to the World Steel Association.
As the commodity story unravels, steel has been one of the worst affected, with falling ore prices exacerbating the impact. China’s shift to a consumption-oriented model from an investment-oriented one has come at a wrong time for the steel industry. China’s output in 2015 till November is down by 2.2%. Although steel production is declining, the fall in demand and falling iron ore prices are sending steel prices lower.
India is a relatively bright spot on the demand front. Finished steel consumption, according to government data, is estimated to have increased by 5.3% in April-November. November alone saw an 11.2% increase. But falling prices and the threat of imports are two points of concern for the industry. The government, of course, has been taking steps to protect the industry from dumping.