Asia Leads as Global Stainless Steel Stats Consolidate and Move Forward

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--As an indicator of recovering economies, the production and consumption of stainless steel is showing some upside. Statistics on the product, which is used in high-end manufacturing and engineering, indicate that China and Asia are the drivers of recovery.

Japan Iron and Steel Federation's statistical report says that the country imported 20,037 tons of stainless steel products in January, which was up by 47.4% from December 2012. South Korea provided 15,149 tons (49.3% increase), Taiwan provided 1,845 tons (46.9% increase) and China provided 1,489 tons (76% increase).

In January, the price of imported stainless steel for Japan averaged $3,218 per ton, an 8.4% decline from December 2012 that was caused by the depreciation of the Japanese Yen.

The Korean Iron and Steel Association reported sales of 103,286 tons of cold-rolled stainless steel products in January, which was up 9.4% from the previous month and 3.7% from the previous year. South Korea exported 41,117 tons of CR stainless steel products in January, up 6.9% from December 2012.

World production continues to move to Asia, where 70% of global stainless steel is produced, with China contributing 46%. Apparent annual consumption (production, plus imports, minus exports) in Asia has increased by 2.5% with India (6.9%) and China (4.2%). In Japan, South Korea and Taiwan, apparent consumption has decreased.

The International Stainless Steel Federation (ISSF) reports that 2012 world production was 35.4 million tons, which was 5.4% higher than in 2011. With strong growth in world production--26.4% in 2010 and 8.1% in 2011--above the compound annual growth rate for the last 62 years of 5.9%, 2012 was a year of consolidation.

Apparent consumption of stainless in the U.S. increased 8.8%. This consolidates the strong growth in 2010 (when it increased 32.3%) and 2011 (28.9%). South Africa's apparent consumption shows an accumulated growth of 72% in the last four years. Europe was flat, and flat products were 2.5% down.

The start-up of new nickel production plants and the decline in consumption have maintained a positive supply and demand balance. At the end of the year, the estimated stock (London Metal Exchange and producers) was equivalent to 14 weeks of consumption.

For related information, see November 2, 2012, article - Record Global Stainless Steel Production, but Mixed Market Message from Mills.

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