World crude steel production increased 8.8% to 117 million metric tons in February compared to the year-ago month, the World Steel Association reports. Among major steel producing countries, China recorded highest production growth of 9.7%, followed by Germany at 7.9%, Japan at 5.7%, and the U.S. at 5.6%. As global steel demand spikes, capacity utilization ratio has been increasing over the past few months.
Global steel production exceeded 1.4 billion metric tons in 2010 with China accounting for more than 600 million metric tons. Industry analysts believe that China-based steel companies will play a key role in Japan's reconstruction efforts. For 2011, the WSA estimates global steel demand to increase 5.3% to 1.34 million tons with India's demand increasing by 13.6% and the EU's rising by 4%, with the industrial sector driving the demand spike.
However, over capacity could plague the industry, specifically in the developed western economies. Consequently, if steelmakers ramp up production at a faster rate, it could hit the profitability levels of steel producers.
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