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
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.
STEEL PRODUCTION - CRUDE STEEL EQUIVALENT ('000 TONNES)
Note:- * - Others include
India, Brazil, Canada, South Africa and other Western Europe.
(e) - ESTIMATE. (f) - FORECAST. + - excludes CIS and PR China.