Global stainless steel production fell by 2.9% in 2007 to 27.6 million tons from 28.4 million tons in 2006. In 2006 there was a 17% increase in production over 2005 driven by distributors and service centres increasing their stocks of stainless steel.
According to preliminary figures released by the International Stainless Steel Forum (ISSF), the decrease in production last year occurred in most stainless producing countries and regions with only the Asia region and China showing increases in production for the year.
Stainless steel production in Asia grew by 6.3% to 16 million tons in 2007, and the region now produces 60% of all world stainless steel. China boosted its production in 2007 by 36% to 7.2 million tons, making it the biggest stainless producing country. During the year, new capacity came on-stream helping to boost the figures. The next largest producer is Japan at 3.7 million tons. All other Asian stainless steel producing countries suffered production declines of between 3% and 15%.
The western Europe/Africa region reported a 13.3% decrease in stainless steel production to 8.7 million tons and production in the Americas decreased by 15.2% to 2.5 million tons. The central and east European region produced a total of 365,000 tons of stainless steel in 2007, 3% lower than the previous year.
ISSF said that comparison on a quarter-by-quarter basis indicates a strong increase in stainless steel production during the first half of 2007, followed by a collapse during the third and fourth quarters, which occurred in the aftermath of the burst in the nickel price bubble.
"During the second half of 2007, the general economic trend was still strong and there was healthy basic demand for stainless steel. ISSF estimates the real use of stainless grew by 7% during this period. It appears that the growth was fed by a massive stock draw, the likes of which has not been seen before. ISSF estimates that almost 2 million tons of crude stainless steel were drawn from stocks in this period," the ISSF said in a statement.
Interestingly, developments in the price of nickel during 2007 were said to have caused a dramatic change in the types of stainless steel produced as the industry began to increasingly market low nickel or nickel-free stainless steel. The ISSF said that the need to empty existing stocks of high-priced nickel-containing steels, to avoid heavy de-valuation losses, put additional pressure on the production of CrNi steels. The market share of CrNi steels 300 series decreased to just 50% of total stainless steel production in the fourth quarter according to estimates, down from 80% a few years ago. |
