The latest worldsteel data shows that steel production outside of China has lost momentum in April. While growth is welcome, its not particularly strong, especially in those countries and regions which are key importers of steel making raw materials.
The last 3 months has seen ex-China crude steel output rise by a meek ~2%YoY. This is a lot weaker than the 4-5%YoY growth rates seen at the end of 2013
Growth in Europe is particularly disappointing, especially given how low the base is. 4%YoY growth is the slowest in 6 months, with the level of output again slipping below those seen in 2012.
Growth in key coking coal export markets like Japan, Korea and India has also shown a slowdown in the rate of growth. Japan has seen the greatest weakness, largely because of the realisation of higher consumption taxes and the impact on durable consumer goods.
These steel data marry up well the the loss of momentum
seen in leading indicators. And it does't appear that there will be a catalyst to change the fortune of global steel output growth anytime soon.
This is makes the recovery in coking coal a bit more difficult, although given shrinking seaborne supply and the degree of destocking China, prices should still edge up, albeit slowly.
