May Steel Production Slumps Everywhere But China
- The World Steel Association announced last week that crude steel production in its 64 reporting nations plummeted 8.7 percent from May 2019 to May 2020 as production declined in almost every country. Crude steel production from China rose 4.2 percent year-over-year, however. North American production fell 36.6 percent. China now accounts for more than 60 percent of global steel output. Yahoo Finance said, “China’s overcapacity remains an overhang for the steel sector. Despite the coronavirus-induced demand destruction, China’s crude steel production expanded in the first quarter of 2020. For the first five months of 2020, output rose 1.9 percent year over year to roughly 411.8 metric tons.”
- According to Capital Economics, though the damage was less than predicted, April’s world trade data “confirmed that coronavirus restrictions have taken a very heavy toll on trade flows.” Trade volumes declined 12.1 percent globally, the largest decline on record. Capital Economic said, “On a regional basis, the picture was the bleakest in the euro-zone and the US, where exports had fallen by over 20 percent.”
- The International Monetary Fund said last week that it believes the COVID-19 pandemic will have a more profound effect on the global economy than previously thought. Specifically, the IMF said the world economy will shrink by 4.9 percent in 2020, worse than the three percent decline predicted in April. The U.S. economy is expected to shrink by eight percent while Europe’s economy could be down more than 10 percent. The IMF predicts China’s economy will expand one percent.
- In other economic news: real disposable personal income in the United States fell five percent in May while consumption increased 8.1 percent; consumer sentiment improved in the United States in June; the number of individual who filed for U.S. employment benefits for the first time fell slightly; new home sales in the United States increased 16.6 percent from April 2020 to May 2020 and 12.7 percent between May 2019 and May 2020; and sales of existing homes in the United States fell 9.7 percent between April 2020 and May 2020 and 26.6 percent year-over-year.