Stainless Steel Me

The world stainless steel production reached 25.9 million metric tons (mmt) in 2008 according to preliminary figures released today by the International Stainless Steel Forum (ISSF). The total is 6.9% lower than 2007 level. After a decrease of 2 % in 2007, this is the second year in a row that world stainless steel production has decreased.
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Beyond the normal seasonal factors of our industry, 2007 as well as 2008, turned out to have the same pattern: excellent first half, extremely depressed second half. The external raw materials price volatility and the overall worldwide economic situation added to the turmoil

The first half of 2008 turned out as being quite positive. By the third quarter, the financial and economic crisis combined with a massive drop in raw material prices – nickel being no exception – struck massively all cyclical industries. Our industry did not escape, on the contrary. Due to overstocks, reduction of excess inventories bought at inflated prices, complete stop of purchases from distributors and some end users, in a matter of weeks we moved from a bright future to a gloomy environment

Overall stainless steel production in Asia w/o China declined by 10.3% to 8,1 mmt in 2008. Asia w/o China and China now account respectively around 31% and 27 % of the stainless steel produced in the world. Over the past few years China has been the driving force behind the growth in stainless steel production. However, in 2008 the country reduced production by 3.6% to 6.9 mmt.

The second biggest stainless producing area, Western Europe/Africa, reported a decrease in stainless steel production of 4.8% to 8.3 mmt in 2008.

The Americas region decreased stainless crude steel melting by 11.1% to 2.3 mmt. Production in the Central and Eastern Europe region declined by 8.6%, more than the world average. However, with production of just 333,000 tons in 2008, the region remains a minor player in world stainless steel production.

Table 1:       Stainless crude steel production (in ’000 metric tons):
2008 compared to full year 2007.

Source: International Stainless Steel Forum (ISSF)

Comparing the individual quarters of 2007 and 2008 shows different patterns in each year. Production in the first two quarters of 2008 was slightly lower than in the same periods of 2007. The third quarter of 2008 showed a recovery of 7 % in production as demand from fabricators increased. However, the figures for the final quarter showed the full impact of the world economic crisis over the stainless steel industry. Production in the fourth quarter was down 30% to 4.8 mmt, the lowest quarterly production figure since the second quarter of 2004.

Over the past few years, the stainless steel market has seen major changes in the types of stainless produced. The sharp increase in nickel prices during 2006 and 2007 saw a shift away from chromium-nickel grades to low nickel or nickel-free grades. As a result, chromium stainless steels and chromium-manganese grades have become increasingly important.

Table 3:       Estimated market share of stainless grades, 2008 (as % of total)