Stainless Steel Me

China’s demand for stainless steel may rise as much as 8 percent this year as government stimulus spending spurs consumption in the world’s largest metals consumer, said an economist with Taiyuan Iron & Steel Group.

Demand may rise to 6.76 million metric tons this year, with government spending accounting for 500,000 tons of additional consumption, said Hao Peigang from Taiyuan Steel, China’s biggest stainless-steel producer.

China’s government has pledged 4 trillion yuan ($585 billion) in spending on housing, railways and other infrastructure to support sagging growth, raising metal demand. Utilization rates at major stainless-steel producers jumped to 90 percent in the first quarter from about 50 to 60 percent in the December quarter, Macquarie Bank Ltd. said Feb. 16.

“China’s domestic demand will be driven by the 4 trillion yuan stimulus,” Hao said. “We shouldn’t be too pessimistic.” China’s stainless steel output would subsequently rise by between 2.7 percent and 11 percent this year, said Hao.

Shanxi Taigang Stainless Steel Co., Taiyuan Steel’s listed unit which accounts for all of the parent’s stainless capacity, said March 11 demand is recovering and prices may be “bottoming.”

Baoshan Iron & Steel Co., China’s second-biggest stainless steel producer, is also increasing output, Vice President Chen Ying said Feb. 16. Baoshan still has one blast furnace suspended in the stainless-steel unit, general manager Fu Zhongzhe said March 30.

All this is positive news for the stainless market along with recent Nickel highs that outlook for the market is encouraging