Stainless Production Up 9% But Slowing
In Asia, stainless steel production grew by 20.2% to 8.5 mmt. Driving forces were again China (+54%) and India (+7%). China produced 3.5 mmt of stainless crude steel and has increased its lead as the world’s leading stainless steelmaking nation. The strong production increase is mainly based on new capacities. The growth will continue for the rest of 2007 as further new capacity is commissioned. Production in Japan has compensated for last year’s losses.
The second biggest producing area, Western Europe/Africa, reported a 3.1% decrease in stainless steel production during the first six months of 2007. Total production was 4.9 mmt in this period.
In the Americas region, stainless crude steel production declined by 2.1% to 1.4 million tons in the first half of the year.
During the rest of 2007 ISSF predicts the use of stainless steel in fabrication will continue to grow. However, following the trend from the first half of 2007, apparent consumption (that is, shipments from the mills) will slow down considerably, showing negative growth rates compared to the second half of 2006. This is based on a stronger than expected need for de-stocking at stockholders and stainless steel fabricators. The de-stocking is influenced by the decrease in the price of nickel. Stockholders and fabricators are trying to reduce stocks of stainless steel that contain high-priced nickel.
As a result, ISSF has lowered its stainless crude steel production forecast to 1.1% growth for the whole of 2007. This would mean total production of 28.7 mmt in 2007. In May 2007, ISSF forecast growth of 5.1% for 2007.