STAINLESS STEEL PRODUCTION SET FOR ALL-TIME HIGH IN 2011

Total world output for crude stainless steel this year is forecast at almost 33.7 million tonnes. This equates to an 8.3 percent, year-on-year, increase on the 2010 figure, which was the previous record. The first quarter total, at 8.39 million tonnes, was an all-time high. Production during the second three months is estimated to have been 2 percent more at 8.55 million tonnes. However, while most countries' outturns for 2011 are expected to represent an increase over the previous year, the tonnages supplied by the established stainless steel making nations of the EU, the US and Japan are predicted to be substantially below the peak figures achieved in 2006.

Stainless steel production in China, on the other hand, goes from strength to strength. The first quarter number of 3.07 million tonnes was an all-time high and the outturn for the second trimester, estimated at 3.46 million tonnes, is a further, quarter-on-quarter rise of 12.6 percent. China's forecast 2011 total output of just below 13.2 million tonnes would be a year-on-year increase of 17 percent.

Japan's output in the first half of 2011 was affected by the earthquake and tsunami in March, in terms of both demand and disruption to production facilities. Reconstruction work will boost consumption in the second six months and we predict a total 2011 outturn of just 0.3 percent greater than last year.

Production in South Korea is predicted to grow significantly this year. The annual forecast total, at 2.25 million tonnes, is marginally above the previous record set in 2006.

Producers in Taiwan appear to be losing market share to others in the Far East. As China and South Korea expand their output, Taiwanese mills are restricting their production to match sales. This year's predicted outturn would be the lowest figure since 2008.

Demand in the US has been increasing very gradually. Output in the first two quarters of this year is estimated to have been 7 percent more than during the same period in 2010. Growth is expected to be a little less in the second half. The annual total for 2011 is forecast to be 4.5 percent higher than in the previous twelve months.

European Union output in the first quarter was 7 percent higher than in the first three months of 2010. Period two production, though, is estimated to be lower than during the same part of last year. After the usual, seasonal lull in the third quarter, we forecast a moderate recovery to complete the year 4.1 percent up on 2010.

Source: MEPS - Stainless Steel Review - MEPS Stainless Steel Prices Online

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