One good way to measure the strength of the global recovery is with a steel yardstick.
At 124 million metric tons, global crude steel output last month was up 29 percent year over year due to growing demand, and it was nearly 10 percent above pre-recession levels in May 2007.
For the first five months of the year, worldwide production exceeded 580 million metric tons, according to World Steel Association figures. Mills have been running at above 80 percent capacity since February – compare that to the mid-60s in the same months of 2009.
China accounts for close to half of global production – 265 million metric tons so far this year, up more than 20 percent from the first five months of 2009. China is now on track to consume 600 million metric tons this year, but analysts expect demand to slow in the second half of this year in response to Beijing efforts to put the brakes on runaway growth.
But that’s a short-term sidebar to the long-term growth story, which is being driven in large part by the rapid middle-class expansion in China, India, Brazil and other key emerging markets.
Infrastructure specialists at Macquarie expect global steel production to increase by 339 million metric tons per year by 2014, and it says China will account for 59 percent of that growth.
