India Tracks Trend: Global Stainless Steel Production Rises 44.3% in First Half of 2010

---

Researched by Industrial Info Resources (Sugar Land, Texas)--India's stainless steel sector is likely to record strong growth in the next two years, as various transportation and infrastructure projects boost demand. Although an economic slowdown in the domestic and global credit market could impact some private-sector projects, large government projects in transportation, such as stainless steel railway carriages, will take a larger market share.

India currently ranks 10th among the world's stainless steel-producing nations, producing between 1.8 million and 2 million tons per year. The country consumes about 2.2 million tons per year and annually exports about 250,000 tons of stainless steel.

Despite the relatively high position on the production ladder, consumption of stainless steel in India on a per capita basis is the lowest in the world, at just 1.2 kilograms. The world's highest per capita consumer is Italy, which uses approximately 30 kilograms of stainless steel per person each year. The global average per-person consumption is 9.4 kilograms.

In January this year, the Indian Stainless Development Organisation (ISDO) forecast that the world's stainless steel demand would rise by about 4.2% each year between 2010 and 2015, with India and China leading the upward trend.

The forecast by ISDO appears to be backed by the latest provisional statistics issued by the International Stainless Steel Forum (ISSF) (Brussels, Belgium). According to the ISSF, production of stainless steel and heat-resisting steel has risen 44.3% in the first half of 2010, compared with the same period last year, which had a total production of 15.6 million tons.

As expected, China continues to lead the production table with 5.47 million tons produced during the first half of 2010, an increase of 35% year over year, but the increase in the production rate was lower than the average recorded by other regions.

The remainder of Asia, excluding China, recorded production volumes of 4.31 million tons, an increase of 46% year over year, while the Western Europe/Africa region was slightly behind at 4.3 million tons, an increase of 49% year over year.

The Americas, the only region to record a slightly lower production output in the second quarter of the year compared to the first quarter, recorded a production level of 1.4 million tons for the first half of the year, and a year-over-year increase of 68%. This was the highest production increase of any single region. The second-highest production increase was Eastern Europe at 63%, but total production level for the region was less than 200,000 tons.

According to the ISSF, the record levels in production can be explained by several factors. The production levels in the first half of 2009 decreased significantly because of the global recession, but the global economy has recovered much faster than anticipated. In addition, there has been a significant rise in the restocking of inventory levels.

The resurgence of the global automotive sector has led to an increased demand for ferritic steels, while the global market for nickel-chrome steels has decreased in comparison. An increased demand in the Chinese domestic market has also led to a growth in chrome-manganese steels.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.