According to Meps, world output of crude stainless steel in the first half of this year was recently reported to have reached 12.9 million tonnes, an increase of almost 6% on the same period of 2004. Almost all the growth in the first-half was in China where production rose by more than 50% year-on-year. Global output, excluding China, edged up by only 1.8%. Oversupply in China meant weak prices there – and ThyssenKrupp’s Chinese cold strip rolling affiliate recorded a loss in the three months to the end of June. The most recent figures demonstrate the effects of mills restraining production – particularly in Europe, but also in some Asian countries – in order to address price falls by curbing excess supply. Several producers are continuing to cut output into the third quarter of the year as sales remain weak. After the earlier build-up of excess stocks, adjustment has been taking place for several months. This is continuing in the third quarter, while demand is diminishing for seasonal reasons. The price of nickel has retreated from the highs that it reached earlier this year. This means that alloy surcharges are falling – in September they will be down by about EUR 40 per tonne in Europe and in the USA by about USD 140 per short ton for type 304 flat products. Demand is expected to remain poor and basis prices to continue drifting lower.
