Stainless output to slip again

According to Meps there will be no improvement in world stainless steel production in 2008. Market demand in the EU held up quite well during the first half of this year. Production cuts are expected in the second period at a similar rate to those put in place during 2007 – leaving the outturn for the full twelve months at 8.1 million tonnes. Japanese, year on year, output tumbled by 10% in the first quarter but was unmoved in the second trimester. Due to a weak export demand no improvement is anticipated in SS manufacturing in the second half of the year. Meps’ forecast for 2008 remains at 3.55 million tonnes. Production of stainless steel in the USA fell by 3.6%, year on year, in the first half of 2008. Meps estimate for the full year is 2.1 million tonnes. Demand is extremely weak, particularly from the automotive segment. Import levels remain high. South Korean stainless manufacturing is also likely to decline marginally in 2008. Output curbs put in place during the first half are expected to remain in the second six month period. Orders from both domestic and export customers are quite poor. Taiwanese consumption is poor due to inventory levels being excessive. Supply in the first and second trimesters was down marginally. The outturn in 2008 is forecast to be slightly higher at 1.45 million tonnes. Production in the “others” classification is expected to decrease in 2008. Brazilian output has declined in the past two quarters. Energy shortages have constrained supply in South Africa. In contrast, Indian stainless manufacturing has improved a little in the first half and should show a slight, year-on-year, gain.