The Dec ’14 stainless crude steel production by six major mills in the country recovered from the prior month. The combined production by these mills totaled 280,066 tons, higher by 5.7% when compared with the production of 264,959 tons during the prior month. However, when compared with the same month a year ago, the Dec ’14 production was down 12.5%. The six mills together had produced 320,008 tons of stainless crude steel during December 2013.
The significant contributor to the rise in production was Shunan Works of Nisshin Steel Co., Ltd. which returned to production after temporary closure from 5th Nov to 18th Nov on account of regular furnace repair works. Increased production levels were reported by Chiba Works of JFE Steel Corporation and Nippon Steel & Sumikin Koutetsu Wakayama. On the other hand, Nippon Yakin Kogyo Co., Ltd.’s Kawasaki Works implemented production cut of nearly 20,000 tons during Dec ’14. The company announced that it is likely to maintain the same production levels in Jan ’15 also.
Generally, as trading firms and customers attempt to cut back the in-hand stocks during January to March, the production during these months is expected to remain soft. However, the drop in production is predicted to be more this year. Reports indicate that some of the stainless steel mills started to implement regular production cuts during the month of December itself. The weakening demand from auto industry is likely to further lower the production plan during the upcoming months.
Incidentally, the stainless crude steel production by the mills for the entire year 2014 declined marginally by 6.2% from 3.63 million tons in 2013 to 3.40 million tons in 2014.
Source: Shanghai Metals Market
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