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General Review Of Stainless Steel In 2009 And Its Outlook For New Year
= China Jumped Up To World First Place In Production Of Stainless Steel With Threat To Expand Further Facilities
The world production of stainless steel in 2009 passed over the year as China was the sole winner and an expansion in Chinese production of stainless steel for 2010 will be unable to achieve such high rate as that in 2009 (increased by 25% from that in 2008) but is anticipated to have a moderate increase of 10 - 11% from that in 2009. The world output of crude stainless steel in 2009 was estimated at the beginning of the year to be on a scale of 22.00 million tons as a pessimistic view but has been now presumed to have reached a level of 24.50 - 24.70 million tons, having decreased by 6 - 8% compared to that in preceding year of 2008. However, apart from the output of crude stainless steel in China for 2009, the quantities of crude stainless steel produced by other main regions in 2009 had been depressed and, when these productions in 2009 were compared with those in 2008, Europe decreased by 25%, Japan fell by 28% and the USA had a considerable decline of 15%.

As regards the quantities of crude stainless steel produced in the world for the last 10 years, the world output in 2001 decreased to 18.70 million tons and, then, the world production of crude stainless steel continued to increase but, after the world output in 2007 reached a peak, the production turned to decrease successively for the next two years. The myth, which the world production of stainless steel will increase eternally, has collapsed. It is an extraordinary case that the world production of stainless steel decreased continuously, but it has been felt actually that a crisis of the world economy caused by the Lehman shock emerged in September of 2008 has put a huge impact on production of stainless steel.

On the basis of those, which this shock has to be overcome and automobile manufacturing has to recover, the world production of crude stainless steel in 2010 is expected to increase to 27.30 - 27.50 million tons from that in 2009. However, in view f the matter, which China will continue to expand their production of stainless steel in 2010 by more than 10% on an annualized base, a revival in production of crude stainless steel by the western countries in 2010 is supposed to have a strong possibility to converge to a low level by deducting the output to be increased by China and, therefore, it is questioned whether a sentiment of the prosperity is able to be felt actually or not.

A considerable reduction in production of stainless steel in Europe and the USA for 2009 caused to have surged a feeling of the crisis even in the structure, which has consolidated the enterprises to produce stainless steel in Europe to four major companies (ArcelorMittal, ThyssenKrupp, Acerinox and Outokumpu) and will produce 1.50 - 2.50 million tons per annum in total of crude stainless steel. The total capacity to produce stainless steel as a whole of Europe is estimated to be 9.00 million tons on an annualized base and the output of crude stainless steel in Europe for 2009 is estimated to be 5.80 - 6.00 million tons. Even if Europe could have recovered the production in 2010 by 10% from that in 2009, a surplus of 2.00 million tons per annum will arise. Therefore, this structure, having consisted of four major stainless steel companies as mentioned above, is now moving to investigate a possibility to consolidate to three companies and this subject has been left to be discussed hereafter. The same case has existed in Japan and a possibility to consolidate stainless steel companies in Japan to a rational scale is being investigated.

When the production activities of stainless steel in 2009 are reviewed and its outlook for 2010 is forecasted, the following matters are pointed out ;

(1) According to the official data released by Antika, China produced 9.90 million tons of crude stainless steel in 2009 but an analyst in the western world said that China would have produced a little more quantity than 9.00 million tons per annum of crude stainless steel in 2009. On the basis of 9.90 million tons as China produced in 2009, their operation rate is thought to come to a low level of 70% of nominal capacity. However, the output of crude stainless steel by China in 2009 had shared more than 35% of the world production and China has jumped up to the first place on production of stainless steel. However, in consequence of a sudden and considerable increase in production of stainless steel in China as arisen from spring of 2009, the stocks of stainless steel products in China have increased steeply and, in order to cope with this negative aspect, stainless steel companies in China, mainly four leading companies, were driven to reduce their production by 10 - 15% in October - December quarter of 2009. However, the production of stainless steel in China has returned to a basic tone to recover from January - March quarter of 2010. At all events, China is anticipated to produce crude stainless steel on a scale of 10.00 million tons per annum in 2010.

(2) The output of crude stainless steel in Europe for 2009 is thought to have converged to a scale of 5.80 - 6.00 million tons per annum, having decreased by 25% compared with that in 2008. In order to adjust the stocks of stainless steel products in Europe, stainless steel companies in Europe implemented to reduce their production in October - December quarter of 2009 and, therefore, a recovery of the production from autumn of 2009 was out of expectation. Consequently, the production of crude stainless steel in Europe for January - March quarter of 2010 is recovering and the output in Europe for the calendar year (January - December) of 2010 is anticipated to increase by 13% to a scale of 6.50 million tons in comparison with that in 2009.

(3) The operation rate for production of crude stainless steel in the USA fell to a low level of 50% of nominal capacity in the first half of 2009 but the US output in July - September quarter suddenly increased by 58% and this remarkable increase in production of stainless steel in the USA was due to a drastic decline of the imports and the weakened exchange rate of US-Dollar currency. The total quantity of crude stainless steel produced in the USA for 2009 is estimated at 1.60 million tons, having decreased by 14 - 15% compared to that for 2008. The US production of stainless steel is anticipated to recover from the first half of 2010 and expected to reach a scale of 1.80 million tons per annum in 2010, which will increase by 12% compared to that in 2009.

(4) Japan produced 2.50 million tons of crude stainless steel in the first half of 2009, having decreased by 28% from the in the same period of 2008, but the output in Japan recovered from July - September quarter and the operation rate in this quarter came back to 80% of nominal capacity. Owing to the active exports of stainless steel products for China and a revival of the automobile industry in Japan, the production of stainless steel in Japan for October - December quarter of 2009 could have maintained a similar scale to that for the preceding quarter of July - September but part of specialized stainless steel companies entered into the structure to reduce their production from November, because of a decline of the orders for stainless steel products to be exported from Japan. The output of crude stainless steel in Japan for the calendar year of 2010 is expected to recover to a level of 3.00 million tons per annum by an increase of 25% from that for 2009.

On the other hand, the cases to invest in facilities for production of stainless steel are still active in Asian region. China and India have been continuing to expand their capacities to produce stainless steel. China is supposed to have already increased their total capacity as of the end of 2009 to produce 14.50 million tons per annum of crude stainless steel and has been still proceeding the project to expand the capacity by a scale of 1.60 million tons per annum. In accordance with an elevation of the living standard of the people in India, the demand for stainless steel products is expected to increase in India and the capacity to produce stainless steel in India is anticipated to come to a scale of 4.045 million tons in the fiscal year of 2010/2011 by a considerable increase of 39% compared to that (2.91 million tons) in the preceding fiscal year of 2009/2010. A huge power of the population has existed in both countries of China and India and an elevation of the living standard of the people caused by the economic growth is expected to increase production and sales of cars and consumption of kitchen-ware through construction. These increases in consumption of stainless steel products will certainly stimulate to expand the production.

A crisis of the world economy caused by a depression had influenced on prices of metals and the averaged price of LME nickel in 2009 had a considerable fall of approximately 30% and come down to US$6.666 per lb. in comparison with that (US$9.58 per lb.) in 2008. Consequently, the output of nickel-based stainless steel in Japan had once decreased year by year but has revived from 2009.

The ratios of nickel-based stainless steel produced in Japan for the last two years were <> 2008 : 57% and <> 2009 : 61%, having raised by 4% from that in 2008. LME nickel price recorded the highest one of US$16.89 per lb. in its history in 2007 and, in consequence of this sharp rise of nickel price, the consumption of nickel-based stainless steel in Japan had a decline. The share in production of nickel-based stainless steel in Japan had a recovery in 2009 because of a fall of LME nickel price. At the same time, the reverse case was that the excessive demand of 56% in Japan for chrome-based stainless steel products from the automobile industry had been compelled to reduce largely this production as a reflection to a substantial decline of car manufacturing. This aspect has been seen in the automobile industry in Japan and South Korea, where have been influenced considerably by a serious reduction in manufacturing of cars.
last modified : Fri 29 Jan, 2010 [10:16]
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