Stainless steel production will increase to 60 million tons in 2023 – MEPS

In 2023, the global production of stainless steel will increase to 60 million tons. Eurometal reports about it with the reference to data from the steel market analysis company MEPS International.

Stainless steel ptoducers in China and Indonesia will make a significant contribution to the growth of the indicator.

India will probably remain the third largest country in the production of such products. At the same time, domestic production will grow by more than 10% as the Indian government invests heavily in major infrastructure projects that consume stainless steel.

Among the downside risks to production growth, MEPS singles out geopolitical tensions and a longer-than-expected inventory drawdown in the West. However, falling energy prices and weakening inflationary pressures give some reason for optimism in the stainless steel market.

China exceeded forecasts for stainless steel production in the fourth quarter of 2022, as the country’s government decided to ease quarantine restrictions caused by the coronavirus. Such a move raised sentiment in the market, which enabled domestic steelmakers to increase production. In addition, the Chinese government is stimulating the real estate sector, thereby increasing economic activity in the country.

According to MEPS, stainless steel production in China will reach 34 million tons in 2023, as positive economic growth expectations and support for sectors that consume such products will stimulate steelmakers.

In Europe in the third quarter of 2022, the production of stainless steel decreased by approximately one third compared to the previous quarter. The weakening of demand and high costs of energy resources forced local producers to suspend part of their capacities. At the same time, the data for October-November 2022 indicate the recovery of production. In addition, several major producers expect demand to improve in the first quarter of 2023 on the back of lower energy costs and inflation.

On the USA market the recovery in activity will take longer than in Europe, as local producers will need more time to liquidate stocks. However, from the middle of the year, production may recover due to seasonal factors.

South Korea in the fourth quarter of 2022 produced only 161,000 tons of stainless steel. The drop in production was caused by a hurricane that damaged POSCO’s facilities early last year. However, the company announced that the cold rolling mill was restarted in January 2023, and the phased expansion of capacity envisages the production of stainless steel at the level of 2 million tons by the end of the year.

As MEPS expects, in 2023, Japan will increase the output of stainless steel by 7% y/y, and Taiwan – by 8.5% y/y. Improving market sentiment in East Asia will contribute to the growth of stainless steel consumption in the current year. At the same time, although the peak of inflation has probably passed, the demand of end consumers in the segments of household appliances and catering equipment may remain limited.

As GMK Center reported earlier, in January-September 2022, world production of stainless steel decreased by 5.1% compared to the same period in 2021 – to 41.85 million tons. Europe during this period reduced production by 11.2% y/y – to 4.81 million tons, the USA – by 13.2% y/y, to 1.59 million tons, and China – by 5.2% y/y, to 23.63 million tons.