STAINLESS STEEL OUTPUT TO RISE 14 PERCENT IN 2006
The world's stainless steel
sector will record an unprecedented jump in crude production this
year. We expect total output in 2006 to climb to 27.8 million tonnes
- 3.4 million tonnes above the outturn in the previous twelve
Such a rate of increase is unsustainable.
The long term growth in production has been around 5 percent per
annum. This year, the figure will be nearer 14 percent.
A substantial rise in output will be
recorded in the EU this year. The gain will be almost 12 percent. A
significant increase was expected after the decline in 2005 but not
a double digit percentage gain.
A noteworthy production rise will also be
reported for the United States this year - expanding to an estimated
2.55 million tonnes from 2.2 million tonnes twelve months earlier.
New capacity pushed the growth to above 15 percent.
It is in Asia, however, that we see the
biggest jump. A momentous expansion in crude steel output has
occurred this year in China. It is now expected that the full 2006
outturn will top 5 million tonnes - making it the largest producing
country in the world. Moreover, the steelmakers are running below
their rated capacity. Furthermore, additional plants are due to come
on stream over the next few months.
The massive rise in Chinese stainless
steelmaking has stifled any serious output rises in the other main
Asian producing nations. No significant gains are anticipated in
South Korea and Taiwan this year. Japan will record a modest
improvement of around 2.7 percent in strong market conditions.
Clearly, with production of stainless steel
rising at such a pace the demand for nickel has been at
extraordinary levels. Nickel prices have jumped to record highs. In
the US and EU, alloy surcharges apply. Customers can forecast the
level of extra cost to be imposed on future sales and have often
bought steel in advance.
Source: MEPS - Stainless
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