Global stainless steel production is expected to grow to 54-million tons in 2021 with an improvement in economic activity and stainless steelmaking capacity in parallel, especially in Indonesia, which is forecast to have a greater output than many developed nations, according to a report released in August by market intelligence company Beroe.
Stainless steel market trends suggest how supply remained constricted in 2020 owing to a lack of demand. Given that the effect on markets of the Covid-19 pandemic is gradually waning, demand is expected to reach pre-pandemic times. Since not many people will be inclined to travel, the demand for consumer goods is likely to rise.
Steel distributors and suppliers believe that the demand for luxury items like appliances and automotives will be on the rise, thus prompting production in the global stainless steel industry and consequent supply of the metal.
However, the supply-demand gap in stainless steel will widen this year owing to factors like high alloy surcharges along with a tightened supply of the metal.
Beroe’s report provides a market overview of the stainless steel industry. The assessment of the stainless steel market trends highlights reduced global stainless steel industry production, roughly by 5% last year, compared with production in 2019 of 51-million tons.
The stainless steel market trend shows a drop in metal production in most countries, except Indonesia and China, owing to quick recovery from the Covid-19 virus. The steel supply in China and Indonesia rose by 2.5% and 15.5% respectively, compared with the mill output in 2019.
The drop in stainless steel market output was, however, not so pronounced in India, which continues as the world's second-largest steel producer despite the complete shutdown of the industry owing to pandemic-induced lockdown in the June quarter of last year.
To cater to the existing demand, the European stainless steel industry imported steel from developing countries. The steel industry suffered an unprecedented setback last year, owing to the high level of imports despite the anti-dumping duties on stainless steel hot rolled from China, Indonesia and Taiwan imposed by the European Union in April 2020.
Stainless steel market intelligence suggests lower demand for metal products owing to global, regional, and national economic conditions. Figures show global production last year reaching up to 2.4-million metric tons as opposed to global demand and consumption of 3.1-million metric tons in the same year. Comparatively, there is an increased level of industrial investment activity with industrial production assuming pre-pandemic levels this year.
End-users are recovering from the effects of the virus with the stainless steel market resuming production. This increased manufacture and subsequent supply are in stark contrast to the reduced demand in industrial and heavy industry, as well as low interest in the purchase and use of the metal in chemicals, petrochemicals, consumer goods, and medical industries.
The Covid-19 impact on the global stainless steel industry was quite noticeable, especially in early 2020. Supply constraints put pressure on the industry, thus increasing its prices. Unstable supply coupled with continued demand for production of necessary items resulted in declining inventories and an extended delivery period of 12 to 16 weeks.
Key findings from the report include the fact that the imposition of tariffs and lack of imports at low prices are adding to raw materials costs; stainless steel prices are likely to be affected by higher alloy charges; China's output of stainless steel 300 series increased by 6.58% touching 14-million metric tons last year; and the imbalance in supply and demand of stainless steel flat products in the US will intensify in the coming months.
Further, it was found that demand for consumer goods is expected to rise, which positively reinforces the end-assessment of stainless steel, while significant logistical disruptions are expected to affect steel supply.
The report from Beroe also includes a global and regional market overview; supply and demand outlook; analysis of Covid-19 impact; pricing and end-use assessment; market and supplier insights, and focus on commodities of concern.