On June 1, 2022, according to MEPS forecast, global crude stainless steel production will reach 58.6 million tons this year. This growth is likely to be driven by factories located in China, Indonesia and India. Production activity in East Asia and the West is expected to remain range-bound.
In the first quarter of 2022, China’s stainless steel production rebounded strongly. With the Lunar New Year holiday and the Beijing Winter Olympics over, supply chain players are returning to the market with confidence. However, production is expected to decline in the second quarter. In Shanghai, a key manufacturing hub, strict Covid-related containment measures have forced many stainless steel consuming businesses to close. Demand is weakening, especially in the auto industry, where sales in April fell 31.6% year-on-year.
Melting activity in India is estimated to have reached 1.1 million tonnes in the first three months of the year. However, production in the next two quarters may face negative pressure. The recently announced export tax on several steel products could prevent sales to third countries. As a result, domestic steelmakers may cut production. In addition, cheap products imported from Indonesia are taking an increasing share of the local market. In 2022, China’s supply could surge.
Major producers in Europe and the US are estimated to have ramped up their stainless steel shipments in the January-March period. However, supply was unable to meet demand due to strong end-user consumption. As a result, its domestic retailers are increasingly importing goods to meet their needs, especially from Asian suppliers. Unstable raw material and energy costs could limit production growth for the remainder of 2022.
The deterioration in the market outlook due to inflationary pressures presents significant downside risks to the forecast. Rising energy costs, due in part to the war in Ukraine, could limit consumer spending. Additionally, manufacturing companies continue to face supply chain delays due to Covid-related containment in China.
Post time: Jun-10-2022