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Engineering Industry Reports and Surveys
News Release from: MEPS (International)
Edited by the Engineeringtalk Editorial
Team on 05 June 2006
Stainless steel surges ahead
Exceptionally strong stainless demand in the European Union and increased activity in China has prompted MEPS to upgrade its forecast for global crude production in 2006.
Exceptionally strong stainless demand in the European Union and increased activity in China has prompted MEPS to upgrade its forecast for global crude production in 2006 MEPS predicts Western world output, this year, rising to 22.25 million tonnes - up 1.35 million tonnes or 6.4% on the outturn in 2005
This article was originally published on Engineeringtalk on 4 Nov 2005 at 8.00am (UK)
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Global stainless crude output is forecast at 26.25 million tonnes this year, an increase of 1.85 million tonnes (7.5%) year on year.
Stainless steelmaking in China and Russia is expected to be close to 4 million tonnes in 2006: approximately 500,000 tonnes higher than the figure recorded in the previous 12 month period.
A considerable amount of restocking is taking place in the EU member states.
Mill order books are full for several months ahead.
MEPS predicts the final outcome for production this year at 9 million tonnes.
This will be 200,000 tonnes above the previous record figure of 8.8 million tonnes set in 2004.
The rising price of nickel earlier in the year prompted buyers to place orders for stainless steel ahead of the peak values earlier this month.
Furthermore, at the end of last year delivery lead times were extremely short and most customers allowed their inventories to fall to low levels.
The expected rise in EU output this year at 725,000 tonnes equates to an increase of 8.7% on the 2005 figure.
This is significantly higher than real demand from the market and leads MEPS to believe that a correction could well take place early in 2007.
New capacity is coming on stream in China this year.
MEPS expects production growth of approximately 500,000 tonnes in 2006.
Some new capacity is already up and running.
Many of the 2005 installations will show improved utilisation rates in this 12 month period.
In the rest of Asia, MEPS predicts only modest rises in output this year.
Export sales to China have reduced.
No substantial production increases over the boom year (2004) are expected.
US production, this year is predicted to hold up at the levels of 2004-05.
Output growth is expected in India and Brazil (in the others category) but is likely to be partially offset by a decrease in South Africa.
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