World stainless production shrinks slightly in first quarter

Brussels, 14 June 2012. The International Stainless Steel Forum (ISSF) has released preliminary data which shows that stainless steel production shrank by 2.8% in the first three months of 2012. Total production was 8.6 million metric tonnes (Mt) for the quarter, down from 8.8 Mt in the corresponding period of 2011. All areas showed a decrease in production in the year-on-year comparison.

The biggest decrease appears to be in the Americas region with a 22% drop in production during Q1 2012 compared to the same period last year. Total production is reported to be 0.6 Mt. However, there are some discrepancies in US stainless crude steel production statistics which ISSF is investigating. China also showed a decline in production of 1.2% to 3.4 Mt compared to the first quarter of 2011. As noted in the table below, CSSC has changed its reporting parameters, leading to some uncertainty about the actual level of production in China.

Table 1: Stainless crude steel production (in ‘000 metric tons)

Region	Quarter		Q-o-Q +/- %	First quarter		Y-o-Y +/- %
	4/2011	1/2012 (p)		2011	2012 (p)
Western Europe/Africa	1,898	2,210	16.5	2,216	2,210	-0.3
Central and Eastern Europe	84	76	-9.8	89	76	-14.8
The Americas	557	607	9.0	779	607	-22.0
Asia (excluding China)	2,177	2,226	2.3	2,238	2,226	-0.6
China1	3,615	3,433	-5.0	3,476	3,433	-1.2
World total	8,331	8,552	2.7	8,799	8,552	-2.8

Source: International Stainless Steel Forum (ISSF)

¹CSSC (the official source of statistical data for the Chinese stainless steel industry) has widened the scope of reporting companies in the first quarter of 2012. Unfortunately, there has been no corresponding correction of 2011 data. Based on ISSF’s own data, the relevant values for China’s production in the first and fourth quarters of 2011 have been amended. The amended data is shown in italics.

Stainless steel production in other Asian countries showed a very slight decrease (0.6%) to 2.2 Mt in the first quarter of 2012. The Western Europe/Africa region showed an even smaller decline in production of just 0.3%. Stainless production fell by 15% in Eastern Europe in the year-on-year comparison.

There is some improvement in production when the first quarter of 2012 is compared to the last three months of 2011. Western Europe/Africa (+16.5%), the Americas (+9.0%) and Asia excluding China (+2.3%) all increased production. Eastern Europe (-9.8%) and China (-5.0%) showed declines. Overall, stainless steel production was up 2.7% in Q1 2012 compared to the quiet final quarter of 2011.

ISSF does not expect the negative growth rates to continue for the remainder of 2012. The current perception is that markets will be driven by real-demand and some restocking will occur in the second half of the year. For the full year 2012, ISSF expects a slight increase on the record production level achieved in 2011.