12 January 1999

WORLD FINANCIAL CRISIS HITS CRUDE STEEL PRODUCTION

Latest estimates show 2.5% decline in 1998

According to the latest estimates¹ by the United Nations Economic Commission for Europe (UN/ECE), world crude steel production amounted to 778.2 Mt in 1998, a 2.5 per cent or 20.3 Mt decline compared with the record year 1997. Although production remained high in the first half of 1998, Russia's currency crisis, economic turmoil in Latin America and a retarding effect of the Asian financial crises depressed output in the latter half of the year.

In the United States of America, output decreased for the first time since 1991. This decrease was slight, however: by 1.0 per cent from 98.5 Mt in 1997 to 97.5 Mt in 1998. A significant increase in imports from Asia was cited as one reason behind the decrease.

In the European Union, despite an increase in imports from Asia and European transition countries, crude steel production in 1998 nevertheless registed an increase of 1.1 per cent, sustained by favourable steel demand from the steel-consuming sectors.

Russia's currency crisis resulted in a sharp drop of 10.1 per cent in crude steel production over the 1997 figure. A drop in exports to Asian countries is also related to the decrease.

Output in the European transition countries was also affected by the Asian financial crises. Aggregate output in the region showed a 7.3 per cent decrease, with 16.0 per cent in Bulgaria and 10.3 per cent in Poland.

The scenario was similar in Latin America. Aggregate output registered a 1.5 per cent decrease as a result of the economic crises in this region. However, the situation in Asia was the worst. A drastic decrease in output took place in Japan, the Republic of Korea and ASEAN² member countries, with 10.5 per cent in Japan and 7.8 per cent in the Republic of Korea. Japan's output was the lowest since 1972. The Republic of Korea experienced a decline for the first time in 32 years since 1966.

The country ranking of global crude steel production in 1998 showed that China remained the largest steel producer for the third consecutive year. Despite the Asian crisis, China's output increased by 5.7 per cent, from 107.9 Mt in 1997 to 114 Mt in 1998 as a result of an estimated 7.8 per cent growth in GDP. China was followed by the United States. Japan lagged behind, falling from second place in 1997 to third, followed by Germany, the Russian Federation and the Republic of Korea.

For further information please contact:

Mr. Akio NOGUCHI

Trade Division

United Nations Economic Commission for Europe (UN/ECE)

Palais des Nations, office 423

CH-1211 Geneva 10, Switzerland

Tel: + 41 22 917 2149

Fax: + 41 22 917 0178

E-mail: akio.noguchi@unece.org

¹ Based on data supplied by countries.

² ASEAN: Association of Southeast Asian Nations. Member countries (currently nine): Brunei Darussalam, Indonesia, Lao People's Democratic Republic, Malaysia, Myanmar, Phillipines, Singapore, Thailand, Vietnam.