The annual total global stainless steel production for 2014 is estimated to have reached an all-time high of 41 million tonnes. This exceeds the previous record mark, set in 2013, by 7.6 percent. MEPS predicts that worldwide output will increase by a further 4.9 percent, to a new peak figure of 43 million tonnes.

In 2014, the outturn in all of the traditional stainless steel making regions, except South Korea, was higher than in the previous year. The recovery was particularly strong in the United States and Japan, though more moderate in the EU and Taiwan. However, production in all of these established stainless steel making countries and regions remains significantly below the peak figures achieved in 2006.

This trend is, of course, more than outweighed by the expansion of production in China and other emerging nations. China’s output last year is estimated to be more than 4 times the 2006 figure. The growth of Chinese production will, inevitably, slow from the rapid rate of recent years. We do anticipate, though, that output will continue to climb by more than 5 percent in 2015, to reach 22.9 million tonnes. This would represent more than 50 percent of global stainless steel production.

Source: MEPS – Stainless Steel Review – January Issue


US flat product transaction values have shown a steep decline over the last month, in the wake of high volumes of cheaper imports and overblown service centre inventories. Domestic mills, experiencing a notable lack of orders, have started to compete on price with overseas suppliers. Dropping mill input costs are softening the blow for some steelmakers. Distributors are purchasing very cautiously as they watch transaction figures plummet. Their resale values are also tumbling as they offload excess stock.

Although auto activity is still strong in Canada, distributors are scaling back their order placement as they wait for steel prices to bottom out. Moreover, oil and gas related sales are declining. This, together with the falling outlay on input costs, has forced steelmakers to make substantial transaction price cuts.

The Chinese economy is showing signs of moderating growth. Steel orders have been cut due to slowing manufacturing activity. This has badly impacted steel prices, which have posted significant losses since MEPS December report. There have been a variety of views on the implications of the government’s decision to withdraw the VAT rebate on exports of some boron-added items. However, it seems likely that steelmakers are already looking to exploit other loopholes.

There is concern in South Korea about the growing volume of foreign steel arriving in the country. This material, as well as steel from domestic sources, continues to flood the market, weighing heavily on selling values, which have undergone further negative developments this month. Falling raw material prices are also driving figures down as customers call for discounts.

Taiwan’s integrated producer, CSC, reported declining sales revenue in November, compared with the previous month, but shipment volumes were slightly up in December. Downstream businesses, anxious about their ability to compete in global markets, have been ordering less. In the marketplace, flat product transaction values are falling.

In Poland, strip mill product prices have decreased when measured in euros. Buyers report that the lower figures are valid until the end of March, although producers are trying to talk them up. Business is quiet in the Czech/Slovak region, following the holiday. Steel demand is still at a low level but is better than a year ago. The mills have yet to make any official price announcements for 2015. Buyers do not believe they will ask for any rises, even in the second quarter. Service centres are purchasing cautiously because of tepid demand.

Source: MEPS International Steel Review – January Issue


At last, the Chinese steel sector has moved to rectify errors in its reporting of steel production. However, there remains much more work to be done before the industry can show that it takes, seriously, the need to provide accurate statistics.

The interested parties include raw material suppliers, steel consumers, local government officials responsible for environmental issues and many other associations which need to assess future trends within the industry.

Whereas the accuracy of the crude steel output data has been improved for the 2013 calendar year, historic figures are unchanged – thus creating false information about growth rates. Furthermore, pig iron production statistics have not been updated. This means that the relationship between iron making and steel manufacturing is not correctly presented.

It would appear that the authorities who have been given the responsibility for the collection of steel statistics have little regard for the accuracy of the data or the needs of the institutions which require such information for guidance in their predictions.

Typically, accurate growth trends in iron and steel production gives valuable information about future investment required to prevent excessive air and water pollution. With better information in the past about real steel production, perhaps, the current situation in Hebei Province could have been avoided. More accurate steel output data may have flagged up the large amount of air pollution likely to come from both the old and new capacity being installed.

Source: MEPS China Steel Review – December Edition