Worldwide stainless crude steel production declined by 1.0% to 24.3 million metric tons (mmt) in 2005, according to the International Stainless Steel Forum (ISSF). It was the first decline in yearly production since 2001. Production was cut in the second half of 2005 due to dramatically reduced demand attributed to stock reductions by distributors and manufacturers.
Asia was the largest stainless steel producing area in the world during 2005. Asia was also the only main production area with an increase in stainless steel output over the year. Production was driven by China (+34% to 3.2 mmt) and India (+11% to 1.5 mmt). All other stainless steel producing countries in Asia failed to match their 2004 output. In total, Asia's stainless steel production grew by 5% to 12.5 mmt. This came on top of an extraordinarily high increase in 2004 production of 12%.
The second largest stainless steel producing region is Western Europe/ Africa. Total output in the region shrank by 6.4% in 2005 to 8.8 mmt. Only Spain and Italy showed an increase in production compared to 2004. However, production in these countries was lower than normal in 2004 partly due to strikes.
Production in The Americas region decreased by 8% in 2005. Total output in 2005 was 2.7 mmt.
The decrease in production has continued into the early part of 2006. Market demand has started to recover in Europe and China. However, demand in Asia and The Americas is still slow, according to ISSF.
The world production of crude stainless steel should stage a recovery in 2006, according to forecasts by London-based MEPS, which tracks worldwide steel production and prices. Estimated output in the first quarter of this year has increased from the low levels of quarters three and four last year, but remains below the comparable period of 2005.
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