According to the International Iron and Steel Institute (IISI), the world’s 66 steel manufacturing countries collectively produced 696 million tonnes of crude steel in the initial six months of 2008, a rise of 5.7% against January-June 2007.

China’s steel production surged 9.6% to 263.2 million tonnes in January-June 2008 over the same period last year. The total crude steel production in the Asian region increased by 8.7% to 68.3 million tonnes in June 2008 from 62.8 million tonnes in the previous year. Also, Europe steel industry recorded a 1.8% rise in the total crude steel production, closing at 18.1 million tonnes in June 2008.

Global steel production is rising to fulfil the higher demand in developing countries such as China, Russia and India, which are building their industrial sector. Also, developing countries are increasingly focusing on development of infrastructure, which, in turn, is fuelling the steel demand globally.

Also, the living standard and lifestyle in developing countries is changing, making the daily used products - such as refrigerators, cars and other household products made of steel - more affordable. Consequently, steel demand is increasing across the globe. Further, increasing penetration of Internet and TV broadcasting is creating more demand for steel to build equipment and towers.

Moreover, low cost regions have witnessed huge investment in their steel industry on account of easy availability of credit at low interest rates. This globalisation has accelerated investment in the industrial sector in these low cost regions, adding to the demand for housing and infrastructure.

The global steel production surged in the first six months of 2008 on the grounds of rising demand. And amid the high inflation fears, steel prices are likely to move up further. However, it will not have any major impact on the production as global demand will remain buoyant in near future due to high industrial activities across the world.

Related Market Research Reports: UAE Steel Industry Analysis