Crude stainless-steel production set for upturn

A MEPS (International) product story
Edited by the Engineeringtalk editorial team Apr 5, 2006

Estimated output of crude stainless steel in the first quarter of this year has increased from the low levels of periods three and four last year, but remains below the comparable period of 2005.

World production of crude stainless steel fell last year, but should stage a recovery in 2006, according to MEPS forecasts.

Estimated output in the first quarter of this year has increased from the low levels of periods three and four last year, but remains below the comparable period of 2005.

The report estimates that crude stainless steel production in the western world (excluding China and Russia) reached 20.81 million tonnes in 2005.

This was a decline of just over one million tonnes, or 4.8%, in 2004.

The sharpest fall came in the European Union, where 2005 production was below 8.25 million tonnes - about 6.5% less than in 2004.

Output also declined in Japan by 5%, the USA by 8% and South Korea by 4.6%.

But stainless steel production surged ahead in China in 2005 - reaching 3.2 million tonnes.

There was also a significant rise in India - up 11% to 1.5 million tonnes.

This left global output last year at an estimated 24.3 million tonnes - about 300,000 tonnes or 1.2% less than in 2004.

MEPS estimates indicate that stainless-steel production in China continued growing in the first quarter of this year, and may have been as much as 18% higher than in the first quarter of 2005.

But most traditional stainless-producing regions have seen their output continue to lag last year's rates.

However, MEPS expects to see production resume an upwards track in most countries during 2006.

This could leave world total at around 26 million tonnes, an increase of around 7%.

Western world output should grow more slowly.

Growing production in China will make it increasingly difficult for mills in other countries to find an outlet there for their surplus production.

Such a development may put a question mark over the profitability of recent heavy capital expenditures on new melting capacity by mills in Europe and elsewhere.

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