While steel production in in April/May 2022, negatively impacted the real estate sector even more. weakened during the second half of 2021 following restrictions on financing for real estate developers, closures during the first half of 2022, especially in
New apartment construction was more than 30% lower on a year-on-year basis during the first half of 2022, which negatively impacted steel demand and led to an increase in Chinese net exports to support steel production.
At the same time, ArcelorMittal added, Chinese net exports of finished products averaged 3.5 million tons per month between January and April 2022, while in May and June 2022 net exports nearly doubled to 6.9 million tons per month.
During the first half of 2022, total Chinese crude steel net exports increased to around 54 million tons annualized, similar levels to 2021; but at a time of weakening demand in the non-China world, this has put pressure on global steel prices and differentials.
In developed markets, the strong recovery in demand in 2021 led to a significant build-up in inventories.
As a result, inventories were at higher levels in the first half of 2022, and together with high inflation weakening demand, caused steel production to decline 4.5% y/y.
In Europe, where energy costs are particularly vulnerable to the disruption of gas supplies from , steel production in the and the combined declined by more than 6% y-o-y during the first half of 2022.
The situation in Europe has been deteriorating during 2022, with production declining by 4% y-o-y during January to April 2022 and then by more than 10% y-o-y in May and June 2022.
Meanwhile, in the United States, production also declined, albeit less severely than in , approximately 2% y-o-y in the first half and, together with developed (down 4% y-o-y), these regions together account for more than 50% of world production excluding China.