Possible SS oversupply

According to Meps, ThyssenKrupp’s (TK) recently announced project to build a new stainless steel plant in the US has caused quite some stirrings. Although North American mills are running full-out this year, the prospect of a new competitor with up to 1 million tonnes of additional capacity may give them some sleepless nights. Plans include melting and hot rolling capacity for 4.5 million tonnes of carbon steel and 1 million tonnes of stainless steel. If TK plans to produce mostly commodity grades at its new stainless plant, then it will be competing head-on with North American Stainless The timing of the proposed installation is unclear. It may be that the additional capacity would be brought on stream in stages. But there is certainly a risk that over-supply would be created. It has been reported that the entire project hinges on whether TK gets control of Dofasco. If it does, the US hot strip mill proposal will be dropped and it is possible that the stainless project would suffer the same fate.
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