The global stainless steel sector is facing a number of difficult questions over the next few months, according to Stainless Steel Review, June 2003. These include a fall in demand from Chinese buyers and sluggish consumption in the industrialised nations. Despite this, total output will reach another peak value this year at around 20.3 million tonnes.
Western World production in 2003 is expected to rise to 19.5 million tonnes – up 3.3% over the figure in the previous 12 months. Response to the Chinese requirements pushed up first quarter output to an unprecedented value of 5.1 million tonnes. This massive 9.5% year on year increase was not sustainable and will be reduced as the year progresses. Capacity increases in the EU, coupled with strong export orders, encouraged the producers to expand output in the first quarter to over 2.2 million tonnes. However, many of the major steelmakers have indicated cutbacks in supply in recent weeks. These amount to a total of 130,000 tonnes from planned production levels in the second half of the year at Arcelor, TKN and AvestaPolarit in an effort to redress the developing oversupply situation.
Japanese steelmakers are decreasing activity. The recent revival in output has been due to a combination of increases in demand from exports and the local auto sector. The latter should stay firm but melting for foreign sales will be curtailed. Consumption in the US is slipping. However, import volumes are in decline. This should enable local mills to maintain output for the year at levels created after the new capacity installation in mid 2002. Posco of South Korea, recently started up a new meltshop, expanding overall capacity by 450,000 tonnes per year. The market is not capable of accepting such an increase, but a modest rise in output this year is expected, as the mill gears up to feed its Chinese cold rolling subsidiaries.
Taiwanese steel producers are suffering from the big drop in foreign sales. We expect total production this year to fall by 100,000 tonnes. Growth in supply is anticipated from several of the countries in the “others” classification in our table. Indian and Brazilian steelmaking is expanding to meet local demand. This is not the case in Canada and South Africa.
