Global steel production was a little slower at the start of 2014, with China weaker and ex-China showing slower YoY off strong gains at the end of 2013. This continues to sap coking coal prices, with there no apparent slowdown in domestic Chinese production, which is required to help lift the market from dreadful levels.
In some ways the slowdown in growth in YoY growth ex-China is too be expected given the weak comps of 2012. At the moment, crude steel output is is better than the start of 2012, although down on early 2011 levels.
Europe continues to recover off a low base and is currently surpassing 2012 output. 2012 wasn't a particularly good year and is someway down from 2011. Nevertheless this is still a positive.
Looking at key coking-coal importing countries, growth has probably been a little slower than expected. Output in Japan has slowed from growth rates seen at the end of 2013, while Indian output has finally weakened after remaining pretty resilient to the poor macro environment in 2013.
Chinese crude steel production growth was slow in the first two months of the year, growing 1.7%YoY according to the NBS. Worldsteel revised their January estimated to take into account this new info, although maybe revised again as it looks like the 2-month aggregate was pro-rated across Jan-Feb.
Pig Iron production growth was even slower than crude steel, rising a marginal 0.2%YoY. But despite the soggy steel sector, coke output appears to be growing a bit more strongly, rising 3%YoY over the last 2 months.
This implies that apparent coking coal production continues rise at a decent rate on a 3mma basis. And this remains the big problem for coking coal prices, with spot assessments languishing at incredibly low levels of under $120/t. There is not a huge amount of evidence that this should change anytime soon.
