MEPS forecasts that
global crude stainless steel production will reach 58.6 million tonnes, this
year. The growth is likely to be driven by mills based in China, Indonesia and
India. Melting activity in East Asia and the West is expected to remain
rangebound.
Chinese stainless
steel production rebounded strongly, in the first quarter of 2022. Supply chain
participants returned to the market in a buoyant mood, at the conclusion of the
Lunar New Year holidays and the Beijing Winter Olympics. Nevertheless, output
is forecast to drop in the second quarter. Strict Covid-related lockdown
measures, in the key manufacturing hub of Shanghai, forced the closure of many
stainless steel-consuming businesses. Demand is weakening, particularly in the
automotive sector, where sales fell 31.6 percent in April, year-on-year.
Melting activity in
India is estimated to have reached 1.1 million tonnes, in the first three
months of this year. However, production in the subsequent two quarters may
face negative pressure. A recently announced export duty on several steel
products is likely to deter sales to third countries. Domestic steelmakers may
cut output, as a result. Furthermore, cheap imports from Indonesia are taking
an increased share of the local market. Supply from that country is likely to
surge, in 2022.