A report produced by the Specialty Steel Industry of North America (SSINA) characterises the US market as serving as the world’s “safety valve” for foreign producers who “do not hesitate to employ unfair trade practices actively and extensively in exporting and selling their excess production in the US market.” The report, which has been provided to US government officials involved in global trading negotiations, names the United States as the country with the single largest market for stainless steel. Other factors contributing to the influx of stainless include very low tariff and non-tariff barriers, and a sophisticated and largely independent distribution system that can be exploited easily by foreign mills desperate to unload excess production at below-market prices. The report lists large subsidised capacity additions that have been announced by foreign producers in China and South Africa, as well as ambitious expansions at existing facilities in Western Europe and Asia. Specifically, the report identifies:
New stainless steel melting capacity totalling more than 6 million tonnes is scheduled to be on stream by the end of 2004. These additions have the potential to increase global production by 25-30% over current levels and represent nearly three times the current annual production of stainless in the United States. These expansions are in addition to the 1/2 million tonnes already added in 1999-2000, as well as the 2.1-2.6 million tonnes currently under consideration for 2005 and beyond.
Global additions to stainless cold-rolling or finishing facilities, all either recently completed or to be completed by 2004, total roughly 2 million tonnes. This compares to total US consumption of 1.6 million tonnes of cold-rolled stainless in 1999. Moreover, 1.6 to 2.0 million tonnes of additional cold rolling capacity are under consideration for 2005 and beyond.
Stainless long products (bar and rod) will see more than 1 million tonnes of new capacity to be added by 2004. This compares to total US consumption of 0.25 million tonnes of stainless bar and rod.
