Global steel producers are now starting to slam on the brakes in response to dimming short-term prospects for demand. Annualised global steel output slumped to 1,405 million tonne in November, the lowest level this year, according to the World Steel Association.

Year-on-year growth slowed sharply to just 1.1% from 6.2% in October, while capacity utilisation slid to a two-year low of 73.4%. Weak production trends have been evident for some time in Africa and Oceania, reflecting political upheaval across North Africa and a wholesale restructuring of Australian producer Bluescope's operations. In Africa, cumulative production fell 15% in January-November. In Oceania, it fell 9% over the same period.

But both are minnows in the bigger steel picture. The global trend is currently defined by the combination of a slowing Chinese economy and a European economy that seems to be sliding inexorably into renewed recession. Chinese steel production actually fell year-on-year in November. It was a marginal 0.2% drop but still the first time this year that annual growth has turned negative after racing ahead at double-digit speed as recently as September. Moreover, the deceleration seems to be continuing, judging by the higher-frequency figures from the China Iron and Steel Association.