China still produced more crude steel than the rest of the world combined. Just a baby step, but a huge change in direction.
By Wolf Richter for WOLF STREET.
Production of crude steel – ingots, semi-finished products (billets, blooms, slabs), and liquid steel for castings – soared globally, and spiked in the US, but fell in China for the first time in years. And China’s share of global crude steel production, after soaring for years, fell for the first time since 2010.
Global production of crude steel rose 3.8% in 2021, from the prior year, to 1,952 million metric tonnes (Mt), according to the World Steel Association. But global production without China jumped by 12.8%, including in North America, where production soared by 16.6%, and in the US alone where production soared by 15.2%.
There have been three episodes of falling annual crude steel production since 1995 – and the pandemic wasn’t one of them: The Asian Financial Crisis in 1998 (-2.7%); the Global Financial Crisis in 2009 (-7.8%); and in 2015 (-3.0%). But during the pandemic in 2020, steel production ticked up a little, and in 2021, it rose 3.8%:
China v. the Rest of the World.
In China, crude steel production in 2021 fell 3.1%, to 1,032 Mt the first decline since 2015, and the largest decline in the data going back to 1996.
But in the rest of the world, production jumped by 12.8% to a record 920 Mt, after having sagged in 2020 and 2019. In 2017, China started outproducing the rest of the world, and the gap exploded in 2019 and 2020. But in 2021, the gap narrowed, and China’s share of global production fell by nearly 4 percentage points to 52.9%.
The year 2021 was a reversal. In 2020, of the top five largest producers – China, India, Japan, the US, and Russia – only China increased production. But in 2021, China’s production fell; in the other four countries, in fact in 18 of the remaining top 19 countries, production rose, and in some countries by the double digits, including the US (+15.2%). The other exception was Iran (-1.9%).
Over the two decades since 2001, global crude steel production surged by 129%, and nearly all of that gain was produced in China. Production in NAFTA (the US, Canada, and Mexico) exceeded China’s production through the year 2000. In 2001, China’s production blew past NAFTA and the gap exploded from there, as NAFTA’s production declined, and China’s soared. But in 2021, the gap narrowed. That’s why the reversal in 2021 was so peculiar:
The top 20 producing countries.
Production of crude steel in India, the second highest in the world, jumped 15.2% in 2021, to a record 118 Mt. But China’s production, even after the drop in 2021, was still nearly 9 times the magnitude of India’s production; and it was 12 times the magnitude of production in the US. Production crude steel in Canada and Mexico is hard to even see:
Most of the crude steel that China produced was used in China as input material for higher-value finished steel products for construction and manufacturing in China. In 2020, China used 56% of the world’s crude steel in its construction and manufacturing industries, roughly the same portion of global crude steel that it manufactured.
So it’s not that China is dumping crude steel on the global market; it produces the crude steel largely for domestic use, but then exports some of the higher value finished steel products, such as bar, pipe, and rolled steel. Chinese manufacturers also use the steel to manufacture sophisticated equipment with steel components, such as automotive components, cars, appliances, or high-speed train systems that are then sold domestically or exported.
Steel goes into nearly everything. So in 2021, amid all the horrid supply-chain problems, the world learned that it’s not such a great idea to be reliant to such a great extent on just one country. And while diversifying steel production to other countries, including the US, was just a baby step, it was still a huge change in direction.
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Hmm, it’s almost as, if our great capitalist leaders didn’t ship off manufacturing to China and had politicians with a backbone willing to plant tariffs on imports, we could’ve had a decent middle class with thousands employed in manufacturing with the added bonus of keeping trade secrets in-house. Granted, the problem isn’t as single faceted as I put it, but the proof is in the pudding. If you build it, they will come.
Granted, you’re not wrong. But the other side of that coin is American’s wouldn’t have low cost goods to buy up without going bankrupt which has definitely been a benefit of globalization.
The USA has to start strategically producing more domestically or move production from China to friendly nations. Good examples are: pharmaceuticals, medical PPE, car parts, solar panels, batteries, etc.
The way forward is a push towards enough economic nationalism that it changes China’s trajectory. Within 5-7 years, China’s GDP will overtake ours. Currently, they are at parity and in some cases past us in all sorts of technology like AI, robotics, fusion, 4th/5th gen nuclear power plants, etc.
And, these things massive changes don’t happen overnight. This has to become a priority for Congress, but sadly it wont.
80 years of continuous dollar devaluation w/o corresponding wage increases did not help domestic manufacturing.
Steel is a coal intensive highly polluting industry, if the Chinese want to do it cheaper and don’t care if their air is like Pittsburgh in 1910, that’s win win.
Except Chinese steel is sub standard.
I work with steel for buildings, machining and fabrication. Chinese steel is made to the Chinese standards of low expectation coupled with the U.S. Chamber of Chinese Commerce sauce of trickery.
1 small example of the trickery. About 4 years ago I drove a sand-point well with the only available “galvanized” pipe from the distributer. I bought 1 1/4″ pipe and this spring I was having suction problems. To my amazement the Inside diameter was not 1 and 1/4″ but nearly 1 3/8″ making the wall thickness so thin that it broke at the thread.
It is all about Trick-effing the customer.
That’s right and German steel seems to be of the highest quality.
Chinese keep good steel for there buildings,rest of world gets the junk . They been scamming the world with there low quality junk ,I think the gigi
Bicycle frame tubing is a good place to look for high quality steel.
Reynolds 853 is good stuff. Made in Birmingham, England. They also make a line of stainless steel tubing.
My friend, Brain Klose, runs EMJ Metals out of Chicago. The ‘EMJ Blue Book’ is a great guide to learn about steel and alloys, and can be accessed online.
Brian set up a sponsorship deal with the U of MN Mechanical Engineering’ Formula SAE program long ago, and I believe it is still in place. My furniture’s steel came from Brian & is straight-gauge seamless 4130 round tubing which I combined with 1″ by 4″ maple boards. Thanks my friend …
When discussing quality of made in China, I get reminded about a question.
Why do “Made in China” sold in Europe usually be of better quality than “Made in China” sold in the USA?
My clients here in U.K. keep being sold rubbish Chinese steel which often gets discovered only upon installation when it’s a problem to rectify. The supplied materials certificates do look serious and imposing each with a big red star stamp and such like but when tested on-site, are in more than 50% situations found to be crap. We now customarily carry out physical tests on all reasonable size batches, and the amount of bad gear caught before it gets installed definitely justifies the expense.
As everyone else, we pass the costs on to the end customers who then get educated about one of the causes of inflation.
Making steel and metallurgy in general is quite the science. I’m not very versed in the arts and technology, but there are a few things that are critical.
No air in the metal. This seems pretty basic, but it is not. Tiny pockets of air can occur when the metal is made.
A pure and uniform alloy with no chemistry imperfections or “pollution” within.
The proper cooling treatment as the metal is formed into whatever product it’s made to.
I learned about steel alloys and how to join pieces of tubing from my bike racing days and apprenticed under a skilled custom frame builder for a short time to get the hang of TIG welding and working with steel. The techniques used by Reynolds in making tubing, for example, and by skilled craftsmen are tried and true. Simple really. But they apply to all aspects of metal working.
The steel that comes from China most likely does not have the same rigid procedures needed to be in place as steels that come from elsewhere.
You have to know where and how your product originated from to get the best quality for your application. It is that straightforward, I reckon.
My track bikes were made with Reynolds 531. The same steel that was used in the Supermarine Spitfire. Now the 853 is way to go for the best steel tubed bike frame. However, the new gravel racing bikes frequently use stainless tubing, and that was an option for me last fall when I chose between carbon fibre and steel for my new winter bike.
For making structurally stressed things, like tall buildings, good steel framework is kind of important, eh?
Sorry to keep on the topic, but ten years ago, the pedestrian and bicycle bridge that was only a few years old in Minneapolis over Hwy 55, and near my home, had support cables that let go because the pieces where they were attached to the bridge deck with were pitted and poorly made.
Had the engineers used high quality stainless steel instead of cheap garbage that had air inclusions from the manufacturing process, the thing would have been fine.
The Martin Olav Sabo Bridge. Made in 2007. Broken in September 2012. “Unaccounted for wind-induced cable vibrations.” is how the stupidity was whitewashed in the “official analysis.”
I looked at the photos of the damaged bridge, esp the cable connectors to the mast. Although a single oversize pin through a gusset plate, this kind of attachment could have been vulnerable to fatigue, resulting from cable vibration, resulting from wind and vertical loading fluctuations. Fatigue is a wily beast, a structure could be exposed to tiny force excitations, but if the repetitions were numerous say 1million cycles + then this type of load can cripple any material, whether it’s a ~400 Mpa strength stainless steel or a ~1000 mild Hardox or ~750 Mpa qt450. It’s a two part dance, designers must check for fatigue and the supplied material must match the design assumptions.
We always check for fatigue on any moveable structures or moveable loads, and this coupled with aggressive checks on supplied materials (especially if from dodgy sources), ensures failures in tenths or hundredths of percents of installations. I cannot think of a failure my team was involved in over the last 30 years and more than 3000 completed projects.
I see you are keen on this topic. I am one record here about the two recent significant US collapses, that of Southside Condo and Tamiami bridge, both in Miami. I love Miami, best Mojitos in the world.
Anyway, both the bridge and the condo were victims of bad design, bad execution and bad after-construction supervision and overview.
The bridge was designed by an office junior who had no understanding of the flows of forces and then he was not checked by someone senior who was supposed to know about forces, and then a pair of them was not checked by a supervisor who in normal world would be expected to have a functioning brain. And then, when the disaster started to unfurl, there was no brain-present supervision by the council or anyone else on the site, to correctly indetify a developing collapse.
On the Southside condo, the structure was an appaling shoddy build, most likely certified with the help of brown envelopes, again designed by a brain-deficient office junior who was not checked by someone senior with a functioning brain, and which design was allowed to go through the council checking, without any provisions for disproportionate collapse. For if you look at the records, the whole thing collapsed in one, in a minute. My bet always was, and it still remains, a resident came back home after a drinking session, went to park in the basement car park, could not judge his stopping time correctly and was made to stop by an impact into a disintegrating concrete column (heavy spalling, sea air, sea water, corrosion in rebar, see the reports), and he sliced it off in one even with a Fiat Panda, and because no provisions existed against disproportionate collapse, the whole thing just came down in one. Unfortunately all evidence from the crime scene was ordered to be destroyed by Miami council a few days later, so people will be forever saying, bad karma, act of god, asteroid, Russians, his mum, whatever.
Thank you. You are much more schooled in the engineering aspects than I am, and I would bet you’re spot on, on both of the failures in Miami.
The diaphragm plates on the Sabo bridge were subjected to salt being used as a deicing agent on them. Plus, they were not sealed on the surface with any preventive measures taken to stop the salt from eating its way into the structure — winter after winter — until they were ready to break with a high wind load. I believe that they were not heat forged and didn’t have a good internal lattice structure also. The damn things were cheap to save money.
URS out of San Fransisco was the engineering firm behind the design.
Nine minutes before the I-35W bridge over the Mississippi collapsed on 1 August 2007, my sister and niece drove across it. It was bucking to the point that it scared my sister.
That bridge fell from having 1/2″ truss plates, which were also subject to salt for deicing, crack. I believe that the design of not using an angle bend on the bottom of the steel plates was an invitation to having them eventually split up and fail; which they did.
I’m just a bike racing motor head that studied physics … not an engineer.
We seem to agree that there is a significant shortcoming in the design/supervision aspect of construction activities, both in the states and the uk. Any from my experience, this extends to whole of europe. Better not mention the so called tier 2 and 3 countries and areas. Sicily is my particular favourite regarding the bad things I saw there over years, but that’s a full books worth of stories.
Hats off re: biking and racing. I have a very close interest in MotoGPs, F1, NASCAR, Indy, and such, because not only you have to have all these extremely brave and strong gladiators handling the machines, but also because of the vast body of engineers tweaking every single aspect of such machines. Engineer’s heaven if you wish.
Mind you, I had to do some work for one of the very heads of that world here in U.K., I went away from the experience thinking, no wonder how great racers died under his tutelage.
Dan, without going sifting through a entire internet of records on Sabo bridge, the best ones I found on an immediate basis were from a firm called ONE, who apparently lead the post-damage remediation.
If you have better ones, as well as in relation to the I-35 bridge, kindly let me have some links, I’d be interested to have a look. Hopefully Wolf won’t mind some vaguely OT links.
On the Sabo bridge, the plates were sent to Professor John W Fisher at Le High University for an analysis, but I do not see any report back from this.
The bridge could have had cable dampers installed at the time of construction, but URS chose to “wait until after construction and have periodic checking for the first 30 days.”
The plates were corroded and shot as I recall, but I don’t have “the smoking gun” to report back to you Stan65.
URS was also the firm hired by the Minnesota Department of Transportation to inspect the I-35W bridge before it collapsed.
The U of MN deemed the bridge to be structurally deficient in 2001.
URS gave the MN DOT two options of advice from 2004 to 2007:
1) Add additional steel plates.
2) Reinspect the plates and the welds in the trusses.
The Governor, Tim Pawlenty, at the time resisted spending money on infrastructure.
Work was undertaken to inspect the welds in May 2007, but they were deemed to be OK. Repair and maintenance of other parts of the bridge began right before it collapsed, and the equipment and work being done was the “straw that broke the camel’s back.”
That is what my sister and niece felt, right before it fell into the Mississippi.
Dan R/Stan 65-thank you for a very edifying conversation (…and always delightful to find that MotoGP-heads are more prevalent than one might think…). Wolf, thank YOU for your editing that allows such excellent exchanges, even if not always directly connected to the topic at hand…
may we all find a better day.
Agree with Vintage, that exchange between Dan and Stan was a refreshing break from the doom porn. I understood little of it and still enjoyed and learned a lot.
China, like a lot of nations, will slowly move steel production over to hydrogen. It’s the one area that makes most sense. While we lag behind in the next 10-15 years, China will make massive in roads to achieving hydrogen dominance in steel production.
Hydrogen instead of coking coal?
1. Hydrogen is 5 to 10 times the cost of coal, even if taken from oil or gas.
2. Generally carbon is not just an energy source but a component in most steel.
Correct me if I am wrong.
Short term issue.
With China stepping back from Zero COVID and opening back up, steel production will ramp back up full force.
BTW, this data was for 2021, before the China lockdowns.
Maybe capitalism as it exists in the US is flawed. The US has fallen behind in many ways besides steel production, yet leads in military spending, medical spending, number of billionaire oligarchs, mass killings and incarceration.
Economist Michael Hudson tells it well in his book, Killing the Host.
“Killing the Host exposes how finance, insurance, and real estate (the FIRE sector) have gained control of the global economy at the expense of industrial capitalism and governments.”
Capitalism, Free Enterprise ? Deader than dead, as the Federal Reserve replaced innovation and hard work, with money printing for front-running for it’s friends in Finance.
Today is all about the Monopoly by the Fed in interest rate suppression and liquidity generation for the special few. Combined with the death of Trust Busting so Monopolies the size of Google and Amazon can have free reign, and the good ol’ U.S. Marketplace for the American Public is an anachronism.
U.S. steel stock has pulled back from 38 to 25. Quite a bit of air out of that one.Seems to be forecasting a slowdown in demand?
Nucor still up 15% for the year, no slowdown warnings so far.
China closed some inefficient steel mills in order to increase profitability. Home construction activity is depressed with property prices sinking in China as of May 2022..
Once they built a replica of the Eiffel Tower in Paris, France at Tianducheng. Much steel has been wasted.
> Much [name any resource] has been wasted.
This is a fundamental design flaw in the human species. It is not correctable by fiddling with a few peripheral variables like politics, economics, or culture. Humans got opposable thumbs and unstable brains, and can’t resist monkeying around and mucking things up. They erect all these silly structures (many absurdly, wastefully competitive) which topple back down on their overdeveloped heads. It is, at least, fun to watch.
Design flaw or random fluctuation. Take your pick.
People follow leaders and money, problems originate at the top
Strongly disagree. It’s that creative monkeying around that drives science forward and is responsible for everything that makes human life today better (for most people) than life 6000 years ago.
But nothing comes without a cost.
Fortunately most of the steel can be recycled. The coal not so much, but there are other solutions for future energy needs.
But if and when China undersells them again, they’ll switch back. Next to not be remedied: the US near total to total dependence on China for a large number of strategic minerals.
I believe China built a steel pipe manufacturing facility in Texas (2018-19). A big one. Don’t know if that falls into the ‘made in US’ folder, or ‘made in China folder’?
If a plant manufactures pipe in Texas, it’s “Made in the USA,” no matter who the owners of that plant are. Ownership doesn’t matter, location does.
Stockman had a few good articles on Chinese steel industry a few years back. Best I remember he thought it was a self feeding boom that led to enormous over capacity once China was built out. I believe he thought China would try to dump steel on the world market, but seems like West has headed that off through sanctions/tariffs plus current supply chain hiccups.
I was going to ask about capacity utilization, too, Old School.
And also about crude steel inventories in China and rest of world.
Wasn’t making steel in your backyard the basis for the Great Leap Forward?
A foundry in every plot!
It was a small part of the program, and it lasted less than a year. Mao visited a real steel mill, and they explained to him how real steel can’t be mad in backyard operations. The program quickly died on the vine after that.
Investing infrastructure, plant and equipment in a country run by communists to save a few short terms dollars, is the same as building high rise buildings on beach sand. Works out great with fantastic views…for a while.
Two billion metric tons of steel a year, a billion just in China. Four Trillion pounds, a quarter ton for every person on the planet.
Steelmaking generates more than 3 billion metric tons of CO₂ each year, mostly from coal, making it the industrial material with the biggest climate impact. No wonder the air in China wipes out a million Chinese every year.
It’s not sustainable, but the good news is that it’s a problem that will fix itself. The bad news is that there won’t be many people left after the world has deindustrialized. In the meantime, climate change realities regularly exceed projections because the IPCC doesn’t want to look like its hair is on fire, and the fossil fuel industry leans on them pretty heavily besides.
Similar situations obtain for lists of other ecological risks. The accounting for environmental assets clearly shows that they’re well-exceeded by the liabilities. I used to be concerned that my jeremiads may fail to convey the proper sense of urgency, but hey, I take a pill for that now, so I’m good.
Meanwhile, the Commerce Dept. has the US solar industry locked up over import tariff issues. No help there. Also the price of lumber is crashing, so now deforestation can be amped up again. No help there either.
I’m going to miss you guys. Well, some of you, anyway.
Be very, very careful that piece of the sky doesn’t crush you when if falls on your head.
1. I am regularly in the forests. The trees would like to thank you for the CO2 that they breath.
2. It is the other gaseous wastes from Chinese Steel mills that are the problem.
“I am regularly in the forests. The trees would like to thank you for the CO2 that they breath.”
What remains of them. Half the world’s forests are gone. Present trends indicate they’ll mostly be gone by 2100, but those trends don’t account for the collapse of civilization projected for around 2040. You can google up the desertification statistics yourself.
They took all the trees, put ’em in a tree museum
And they charged the people a dollar and a half just to see ’em.
Don’t it always seem to go
That you don’t know what you’ve got till it’s gone?
They paved paradise, put up a parking lot.
Oooh! Bop bop bop bop!
Plants don’t “breathe” CO2 you unaware fool. They “breathe” O2 just EXACTLY like us. Their big trick is using certain wavelengths of light to split H2O, and then attaching the H to a C, taken from the CO2 in the air. They use some of the O for their own “living program”, but dump most of the rest.
Don’t feel bad, their are millions of Americans as ignorant as you, they slept in HS Biology.
But they WILL thank all of us for increasing the CO2 and heating up the planet so they can have it all to themselves again. We are just parasites, to them.
BTW, you sure as hell aren’t going to “work with steel” for me if you can’t even see or tell wall thickness by weight…..sheesh!
Do you even own a caliper?
Just say you think climate change is a hoax and get it over with…..
Photosynthesis uses CO2, water and light to produce O2 and glucose. Respiration uses 02 and glucose to create energy with CO2 and water as waste. Net net, plants consume more CO2 than they expire, and expire more O2 than they consume.
Oxygenic photosynthesis takes CO2 from the atmosphere, sunlight and water from the plant to create sugars in the plant’s cell structure, (glucose for the plant to grow) and O2, which is released in the atmosphere.
Light energy transfers electrons from the water taken up by the plant roots to the CO2. The CO2 gets electrons. Water loses electrons. Oxygen and carbohydrates are the net result.
-DanBob, Son of a Breeder, wheat that is.
Just watered my gardens while having my first dose of coffee.
Regardless what the mechanism is, it’s relatively unimportant. The CO2-to-the-rescue crowd will take some laboratory/greenhouse result, and run away with it as the only thing that matters. They don’t ask for more complex evaluation since it suits their lifestyle.
Steel production by value would be a more accurate indicator. Raw steel is imported to NA, and then processed further to useful products of much higher value and price.
That probably is masked in the overall statistics.
Sad to note that the UK steel industry, once the greatest in the world, is not even on the list. How the mighty are fallen!
We do however, lead the planet in our COP26 zealotry.
Looking at the latest Apr 2022 global steel figures, it looks somewhat like a sustained swing away from China, to India.
UK was the world’s no.1 steel manufacturer with 40-50% global market share in 1875, collapsing to <1% by 2022. Quite a slide.
Chinese steel production seems to be a gigantic make-work project to keep Chinese men in jobs and not protesting on the streets. I did read somewhere once that a substantial proportion of Chinese-made steel – maybe 30% or more – was garbage and unusable. I guess they recycle and remill it, unless they stack in somewhere to rust quietly back into the earth
The only other explanation as to their gargantuan steel production statistics is that a giant steel-munching monster is hiding somewhere deep in a cave in Guangdong province. 😃
Rumor has it China has built thousands of kilometers of underground tunnels to facilitate the clandestine movement of their nuclear missiles. That might also account for some steel overconsumption in the Middle Kingdom.