GLOBAL
STAINLESS STEEL PRODUCTION WILL TOP 25 MILLION TONNES THIS YEAR
MEPS (International) Ltd
forecasts global stainless crude steel output in 2005 at 25.3
million tonnes - up from 24.4 million tonnes a year earlier. This
equates to an increase of 3.7 percent. We expect this year to be one
of consolidation after the 7.3 percent rise in 2004 versus 2003.
Western World stainless steel manufacturing
is likely to reach 22.4 million tonnes this year - 3 percent above
the 2004 outturn. Over the past twelve months the markets in the
industrialised nations have been oversupplied. This has led to basis
price reductions in the EU and United States.
We anticipate an inventory drawdown by
customers over the next few months in the latter two regions. Buyers
are expected to re-evaluate their stock levels and regulate
purchases more in line with current works order requirements. This
will restrict increases in stainless output to smaller percentages
than in the recent past. Moreover, export volumes from the EU to
China are likely to be lower.
Japanese supply appears to have stabilised
at around 4 million tonnes per annum after rationalisation in the
industry of late. We predict a no change situation this year. Growth
in Taiwanese output is expected to be modest in 2005. After heavy
investment in South Korea, we believe that production levels will
settle at around 2.5 million tonnes per year into the near term.
In the "others" category,
Brazilian, Indian and South African supply should all improve -
resulting in total output of 2.85 million tonnes this year.
Chinese stainless melted production is
forecast to expand by 300,000 tonnes in 2005 as recently installed
capacity is brought up to full potential and new plants are started
up. No substantial increase is predicted from manufacturers in the
former USSR.
