Oversupply continues to characterise many flat rolled stainless steel markets around the world. Global output of crude stainless in 2004 was around 7.5 percent higher than the year earlier figure. The increase in supply was so far out of line with consumption that it was followed by the inevitable price weakness. Over-supply will continue to affect the market for a little while yet. Additional capacity is entering the scene. Outokumpu is ramping-up its newly expanded melting shop and cold rolling facilities at the Tornio works in Finland. The company has acknowledged that the weakness in the European market means it is directing greater volumes of stainless into Asia instead. European mills are also selling into Russia where local stainless production has been reduced drastically owing to lack of profitability. Chinese stainless output will rise this year, notably with the start-up of new capacity at Baoshan and Taiyuan. China is increasing its imports of stainless scrap from the USA by 20%. Global stainless production so far this year is growing more slowly than the unsustainable pace seen in 2004. In the European Union, output in January-February was about 4% ahead, year on year – a figure that is not excessive given that the comparable period was hit by strikes. An anticipated projection for world stainless steel-making in 2005 is a 3.7% increase over last year’s 24.4 million tonnes. Assuming consumption rises at its usual 5-6%, we can envisage balance being restored before 2006.