GLOBAL STAINLESS STEEL OUTPUT WILL CONTINUE EXPANDING RAPIDLY

We have uprated our estimate for Western World crude stainless steel production in 2003 to 20.3 million tonnes. The upgrade was necessary to accommodate higher than anticipated outturns in South Africa, India, Taiwan and Brazil last year. Data from China differs widely but our latest estimate shows total crude steel production at 700,000 tonnes in 2003 - giving a global figure of 21.3 million tonnes. This equates to an 8.5 percent year on year increase.

Our forecast for global output in 2004 is now 22.5 million tonnes - up 5.6 percent on the year earlier number. We predict the share supplied from countries in the Western World at 21.1 million tonnes.

Steelmaking in the EU started slowly in 2004 due to the loss of 80,000 tonnes at Acerinox's strike hit plant in Spain. We expect this reduction to be made up well before the end of the year. A modest gain is anticipated.

Japanese steel manufacturing continues to be quite firm, despite relatively weak domestic demand. A small year on year improvement is expected - based mainly on export sales.

US production is expanding. The market is tight. We forecast a steady gain in stainless output this year.

With the introduction of new capacity at Posco, steelmaking continues to rise as the plant settles in. We now foresee crude production, this year, at substantially in excess of 2 million tonnes. Taiwanese supply is not likely to change significantly because sales to China could be limited.

We expect output from India, South Africa and Brazil to continue moving upwards in 2004 but at a slower pace than in the previous twelve months. Chinese supply will increase sharply to near 1 million tonnes.

Source: MEPS - Stainless Steel Review