An expectation of growth of up to 4% next year, led as ever by China, offers positive news for the stainless steel industry, according to the Bureau of International Recycling.
Its latest Mirror reflects on how global manufacturing activity remaining depressed during the third quarter with Europe in particular experiencing a significant slowdown. But Joost Van Kleef, chair of BIR’s stainless steel and special alloys committee, is more upbeat in his contribution.
‘On the positive side, the end of the second quarter marked the conclusion of a destocking period which had lasted an unusually long time owing to the sheer volume of stainless steel flat and long products imported into Europe from third countries last year. With imports and import penetration back to normal levels, mills have been enjoying some breathing room for their own production in Europe.’
Van Kleef reports that scrap demand strengthened during the third quarter, although availability remained constrained largely because of slow manufacturing activity.
‘Global stainless production is likely to see another year-on-year increase in 2023,’ he says. ‘Analysts are predicting growth of some 3% or even 4% for the year. Once again, the expansion is to come from China.’
The Mirror’s section on Asia notes the regional stainless sector reached a bottom in terms of pricing and demand in August before rebounding in September ‘but it is anyone’s guess as to whether this small recovery is a dead cat bounce or the start of a slow uphill battle.’
Entering the fourth quarter, it adds, the demand picture for stainless steel scrap appears cloudy, with the market likely to remain in a tight range given the combination of low volumes of incoming scrap from manufacturing activities hit by the macro-economic slowdown and of low production levels for stainless steel end products.
According to latest data from the Indian Stainless Steel Development Association, domestic consumption grew nearly 10% during the most recent fiscal year to reach four million tonnes while the global average as stainless steel production contracted 5.2% from 58.2 million tonnes in calendar year 2021 to 55.2 million tonnes in 2022.
The US Commerce Department reports that the USA exported more than 267 000 tonnes of recycled stainless steel in the first half of 2023 – an increase of 78% over the same period in 2022. Improved demand from Mexico, India and Taiwan were the main drivers of this increase.
In the Middle East, the rising demand for stainless steel across various industrial sectors is a significant feature of the growth in the Gulf Cooperation Council region. ‘The surge in construction projects and infrastructure development is stimulating the need for materials containing this metal,’ the Mirror says.
‘The market for stainless steel is bullish,’ it goes on. ‘Construction activity in the UAE jumped almost 50% in the second quarter of 2023, despite higher raw material costs. This increase was led by the country’s residential sector but commercial and infrastructure were also buoyant, with activity levels up by, respectively, 35% and 44%.’