GLOBAL
STAINLESS STEEL OUTPUT GROWTH SET TO CONTINUE
Our forecast for global
stainless steel production in 2005 is 25.3 million tonnes. This
represents an increase of 3.7 percent, year on year, and is below
the long term average for the industry. It still remains very clear
that most of the growth will occur in the developing nations of the
world. Production in the industrialised countries is stagnating.
China remains the power house for stainless
demand. New capacity is being installed at a rapid pace to meet
expanding requirements. However, the government has recognised that
current output increases are not sustainable. Stainless steel has
been included in a list of energy and resource investment industries
which will be given less support from the government in future.
We expect EU production to increase
marginally in 2005 to 8.9 million tonnes. Currently, the steam has
gone out of the market due to poor economic activity in the region
and a slowdown of export potential.
Japanese demand is reasonable -
particularly from the automotive segment. However, as in the EU,
exports are much more difficult to find and output cuts have been
put in place.
The US market suffers from high levels of
imports. The mills find it difficult to compete in many product
categories. Production in 2005 will be similar to the previous
twelve months.
South Korean stainless steelmaking should
level off at near to 2.4 million tonnes per annum after Posco's
considerable investment over the past two years. Taiwanese supply
should also settle down at around 1.6 million tonnes in the medium
term. The mills in both countries have indicated production curbs in
the third quarter.
China, South Africa and India are the
countries exhibiting continuous growth tendencies. Brazil is also
likely to contribute more over the next few years. There are
increasing fears that China will become a net exporter of cold
rolled coil in the short term and have a surplus of stainless
steelmaking before the end of the decade.
STAINLESS
STEEL PRODUCTION - CRUDE STEEL EQUIVALENT ('000 TONNES)
2004
2005(f)
Q3-04
Q4-04
Q1-05(f)
Q2-05(f)
Q3-05(f)
Q4-05(f)
European
Union
8800
8900
1980
2235
2280
2320
2000
2300
Japan
4000
3950
980
1015
1020
980
950
1000
United
States
2300
2350
580
580
580
570
600
600
South Korea
2275
2400
630
565
600
610
570
620
Taiwan
1600
1600
390
415
420
410
370
400
Others*
2775
3000
705
685
720
740
770
770
Total W.
World+
21750
22200
5265
5495
5620
5630
5260
5690
China/Russia
2650
3100
670
680
720
750
800
830
Global
Total
24400
25300
5935
6175
6340
6380
6060
6520
Note:- * - Others include
India, Brazil, Canada, South Africa and other Western Europe.
(e) - ESTIMATE. (f) - FORECAST. + - excludes CIS and PR China.
