Loading icon Loading
3 min read

Global stainless steel production will reach 60 mln tonsMEPS predicts that global stainless steel production will reach 60 mln tons in 2023. Contributing significantly to this growth will be steel mills in China and Indonesia.

India is likely to remain the third largest stainless steel producing country in 2023, but its production is expected to increase by more than 10 per cent. The authorities in this country are investing heavily in large infrastructure projects that consume stainless steel.

Downside risks in the latest MEPS forecast include geopolitical tensions and the recent destocking phase in the West, which has lasted longer than expected. However, falling energy costs and easing inflationary pressures are cause for optimism in the stainless steel market.

In China, production in Q4 2022 was higher than expected, thanks to the government’s decision to ease Covid-related restrictions. This move strengthened market sentiment and, as a result, domestic steel mills increased their production. Furthermore, the authorities are providing stimulus to the indebted real estate sector, which many market participants believe will fuel economic activity.

The International Monetary Fund expects China’s GDP growth to stabilise at 5.2% this year. This is expected to support key consumer sectors such as construction and appliance manufacturing. As a result, the MEPS estimates that stainless steel production will reach 34 million tonnes in 2023.

Global stainless steel production will reach 60 mln tons

Global stainless steel prices – $/ton – Commodity Evolution survey

In Europe, production in July/September 2022 decreased by about one third, quarter-on-quarter. Local steel mills withdrew smelting capacity due to weakening demand. High interest rates and energy costs caused a drop in consumption by end users.

However, production figures for October/November 2022 suggest a recovery in output, which is expected to reach 1.47 million tonnes in the fourth quarter. Moreover, several major stainless steel producers expect shipments to improve in the first quarter of 2023.

They believe that inventory replenishment will begin in the short term. Recent reductions in energy costs and signs that peak inflation has already been reached are fuelling market confidence.

US production in the fourth quarter of 2022 is estimated at 450,000 tonnes. The recovery of smelter activity in the first three months of 2023 is expected to be slower than in Europe. The destocking period undertaken by local distributors may last longer than previously expected. However, merger activity is expected to resume mid-year, due to seasonal reasons.

In South Korea, production in the last three months of 2022 reached only 161,000 tonnes. This was due to hurricane damage to POSCO’s stainless steel production facilities earlier this year. However, the company recently announced that its cold rolling mill for stainless steel was back in operation in January. MEPS expects a gradual increase in production in 2023, with a total of 2 million tonnes for the year.

Production in 2023 is expected to increase year-on-year by 7% in Japan and 8.5% in Taiwan. The improving market climate in East Asia is expected to support a recovery in stainless steel consumption in 2023. However, even though peak inflation may have been overcome, end-user demand in segments such as home appliances and restaurant equipment may remain limited.

Global stainless steel

China Stainless Steel prices – $/ton – Commodity Evolution survey