STEEL NEWS

MEPS raises forecast for global stainless steel production in 2021 to 11%

British analytical agency MEPS International Ltd. raised its forecast for global stainless steel production to 56.5 million tonnes for 2021. This is 11% more than in the previous year. Stronger-than-expected production in Indonesia in the first quarter and robust growth in China support the projected growth in supply.

Indonesia's stainless steel production in the first quarter of this year reached 1.03 million tonnes, a record for the country. During this period, manufacturers increased their supplies to Europe. Anti-dumping duties have been applied to Indonesian cold-rolled coils arriving at European ports from May 2021.

Indian smelters are projected to smelt 3.9 million tonnes of stainless steel in 2021. Strong industrial consumption in Europe boosted export sales in the first quarter. India's position as the second largest stainless steel producer is under threat. Indonesian manufacturers are investing heavily in new facilities. Production at these plants is projected to be in line with Indian steel mills this year.

China's annual production is projected to rise to 31.9 million tonnes. Attempts to limit steelmaking in the first half of the year proved ineffective. Government measures to limit exports are expected to reduce production in the remaining months of 2021.

Production figures in South Korea, Japan and Taiwan will surpass those of 2020. However, uncertainty remains about the full impact of an industrial fire at the Yieh Corp. plant. in Kaohsiung, Taiwan. This year, the country's production is unlikely to reach its pre-pandemic tonnage.

In the European Union, stainless steel shipments are projected to rise in double-digit percentage terms and rise to 6.95 million tonnes in 2021. Third-quarter shipments are expected to decline due to recent poor weather conditions. Floods in Northern Europe damaged steelmakers and disrupted logistics operations. A moderate recovery is expected in the fourth quarter.

US steel mills are expected to record production growth of nearly 15% to 2.46 million tonnes in 2021. Although capacity utilization has exceeded 80% since the end of May, steel mills have been unable to meet healthy domestic demand.

Despite the growth in production worldwide, there is a shortage of stainless steel in most markets. Global end-user consumption is healthy thanks to economic stimulus packages and positive post-pandemic outlooks.

Low inventory levels exacerbate significant supply shortages. Consequently, in the medium term, prices are likely to face continued upward pressure.