Global crude stainless steel production is predicted to reach a new record annual total of 40.2 million tonnes, in 2014 as reported by MEPS. This would exceed the previous high figure, set last year, by 5.7 percent. Output is expected to grow in all of the major stainless steel making countries and regions.Stainless Steel Review

Some of the established stainless steel producing areas are performing more strongly than had been anticipated. Output in the EU, in the first six months of this year, is estimated at around 4 million tonnes. A twelve-month total of 7.55 million tonnes is forecast, representing a year-on-year increase of 5.7 percent.

Output in the United States, in the first half of 2014, has also outstripped our previous forecast. The annual outturn for the year is now predicted at 2.1 million tonnes, an increase of 3.4 percent over the 2013 figure.

The recovery in Japan continues at the expected rate. Production in the period from January to June is reckoned to be 1.65 million tonnes. A similar figure is anticipated for the second half of the year, to give an annual total of 3.3 million tonnes – 4 percent greater than in the previous year.

South Korean production is predicted expected to turn out at 2.15 million tonnes for the whole of 2014. This equates to a 1.9 percent increases over last year. Our forecast for stainless steel output in Taiwan, this year, has been uprated to 1.125 million tonnes – a year-on-year advance of 4.1 percent.

Expansion in the emerging economies will continue at a higher rate than in the traditional areas. Chinese production has exceeded expectations during the first half of 2014 and is anticipated to expand by 6.4 percent year-on-year, to achieve an annual figure of 20.2 million tonnes – more than half of the global total.

Crude stainless steelmaking in the rest of the world is predicted at 3.775 million tonnes, this year, giving a growth rate of 7.8 percent over the 2013 total.

Source: MEPS – Stainless Steel Review – July Issue


US flat product transaction values are currently slightly lower than those reported in June, according to MEPS. However, some minor upward pressure has been noted in recent weeks. Mills in the mid-west still have relatively long delivery lead times due to supply problems earlier in the year plus scheduled outages at US Steel and ArcelorMittal. Moreover, there is excellent demand from the auto sector. Manufacturing is strengthening and construction is improving. Although overseas material is very International Steel Reviewcompetitively priced at present, possible protectionist moves by the US government are creating a great deal of caution amongst both traders and potential customers, regarding forward ordering of material from third countries, primarily China.

With the exception of hot rolled coil, Canadian transaction figures are holding firm but there are some mitigating factors. The reline of ArcelorMittal’s Chicago furnace has led to orders being moved to Dofasco, pushing delivery lead times out by two to three weeks. Demand remains sluggish and cheaper, offshore material has arrived, with more to come. Inventories remain on the low side.

There is still a supply glut in China as production remains high. Consequently, prices have continued to head downwards since MEPS last report. However, overall inventory levels declined in June. A recent stimulus plan, combined with new infrastructure projects, is expected to support steel consumption over the coming months. Export volumes continue to grow, year-on-year, as producers cut overseas quotations to boost trade.

As the economic recovery continues in Japan, domestic order intake rose in May, year-on-year, allaying fears that April’s increase in consumption tax would cause serious damage to steel consumption. In contrast, export volumes were still declining. Imports continue to grow, despite a weak yen. Flat product market prices are firm.

Stagnant demand and oversupply have led to discounting in South Korea. Economic forecasts have predicted a slowing of growth in the second half of 2014. This creates a gloomy outlook for the steelmakers who are also having to contend with a great deal of import competition. The mills are looking to overseas markets to offload their surplus capacity.

In Taiwan, major integrated producer, CSC, will leave domestic list prices for September contracts unchanged after decreasing them for the July/August period. The third quarter is, traditionally, a time of low demand because of the rainy season in South East Asia. However, the company has started to see signs of recovery and does not think it is necessary to cut prices further.

Polish activity is no better ahead of the summer vacation. Due to changes in the exchange rate, effective values have increased slightly in the local currency. This represents unchanged prices in euro equivalent terms. The Czech economy is slowly recovering, as is consumer confidence. Steel output is expanding as industrial sectors show signs of growth. However, selling values remain under negative pressure.

Activity in the West European market is quiet ahead of the holidays. Although consumption is strengthening in several countries and economic indicators are good, producers, keen to book orders, have agreed further small price reductions. Customers point out that the mills have relatively low raw material costs and cheaper third country imports are readily available.

Source: MEPS International Steel Review – July issue


According to MEPS latest steel report – Developing Markets’ Steel Review, the Russian steel industry remains optimistic over the prospects for consumption and production in the third quarter of 2014. Long product steelmakers have delayed releasing their August basis quotations.Developing Markets Steel Review

Uncertainty continues to unsettle business confidence in India. The monsoon rains have been heavier than expected. Internal steel producers have resisted offering discounts and more favourable payment terms, fearing such measures would be counterproductive and only fuel further price instability.

In China, business confidence has weakened in recent weeks. Local stockists are booking for immediate requirements only, due to continuing price fluctuations and the arrival of the rainy season.

Ukrainian distributors have struggled to adapt to the unpredictable business environment. Shipments for construction and infrastructure projects remain scarce.

Turkish steelmakers have had mixed success in their efforts to advance higher transaction values to distributors. Price support from external demand is limited.

Demand for construction steel in the United Arab Emirates has been deflated by the close proximity of the summer and Ramadan periods. It has also become too risky for buyers to conclude any deals at this stage because of volatile import quotations.

Stable trading conditions are forecast in the Mexican market during the third quarter of 2014. Underlying demand is expected to be driven by shipments to the automotive and construction sectors.

Source: MEPS Developing Markets’ Steel Review


There has been some downward pressure detected in the German hot rolled coil market, according to MEPS. A number of service centres have financial difficulties as end-users press for reductions. Consequently, they in turn, are calling for discounts from the mills.European Steel Review

MEPS has noted a small downward price correction for commodity plate. However, recent statistics have revealed that stocks at the service centres fell during May by over 5 percent, month-on-month, and that the quantities sold by distributors were up by around 9 percent.

Cold rolled coil demand remains satisfactory but, with the exception of the auto industry, there is no significant improvement. There is plenty of Russian material on offer but domestic suppliers have maintained basis figures at the June level.

Auto production is going well with good local sales and a healthy export market, especially in China and the USA. However, the carmakers are trying to reduce their steel costs wherever possible, so distributors who serve that sector complain of poor margins. Construction related sales of hot dipped galvanised coil are fair. In the general market, basis numbers have weakened slightly, due to oversupply.

Low carbon wire rod producers have held on to selling figures for the fourth consecutive month. There is little activity in the recoil market, where values are unchanged, despite buyers’ calls for discounts.

In the structural sections market, suppliers have been forced to concede a €20 per tonne discount during recent settlements. Sales are subdued and supply is in excess of demand.

Rebar prices are unchanged from a month ago. Sales volumes are running at reasonable levels, with construction output forecast to grow throughout 2014.

The mills have again succumbed to calls for further discounts for merchant bar. Purchasing activity is cautious as buyers are unsure of future price movements. The hope for improvement in business levels has not materialised, so far.

Source: MEPS European Steel Review



MEPS research reveals that strip mill product selling values have decreased, across the Nordic region, in euro terms, during July. Consequently, mill profit margins have been squeezed. Demand for hot rolled coil remained stable at a low level. The producers’ European Steel Supplementsales volumes are expected to pick up, after the summer break. Overcapacity persisted in the cold rolled coil market. Competition between the distribution businesses of SSAB and Rautaruukki continued to keep prices under negative pressure, before the details of their merger were finalised. Sales of galvanised material to the automotive sector remain fair. Demand is expected to remain steady throughout the summer and market participants are hopeful of an upturn thereafter.

Sales tonnages, for commodity plate, were steady in Denmark and Sweden as suppliers attempted to maximise orders in advance of the slowdown during the holiday period. Market sentiment was less positive in Finland. As a whole, prices were unaltered across northern Europe.

Structural section selling figures decreased, in euro terms, despite strong consumption in some countries. Activity in the Swedish rebar market was robust as several major projects were in progress. On the other hand, there was little infrastructure investment in other countries researched. As a result, ex-mill prices were lower, month on month. There is expectation that public spending will increase in the near future. Transaction values, for merchant bar, decreased in July. Demand from the manufacturing sector was at a good level in Sweden. However, we noted a seasonal slowdown in business activity in other Scandinavian countries.

Source – MEPS European Steel Review Supplement – July 2014 Edition


Activity in the European flat products market is quiet ahead of the summer holidays, according to MEPS research. Although consumption is strengthening in several countries and economic indicators are good, producers, keen to book orders, have agreed to further small price reductions. Customers have called for lower basis values, citing the mills’ relatively low raw material costs and the availability of cheaper third country imports.European Steel Review

As the domestic auto sector is busy, German steelmakers have strong order books from those companies. However, other industrial sectors are only performing at a level comparable to last year. Distributors are reducing resale values in order to compete for business. Buyers are of the opinion that further minor weakness could develop over the next six to eight weeks.

Activity remains weak in the French market, where end-users have short order books and are worried about the situation in September. They are, therefore, unwilling to order material now. There will only be a slight increase in orders for September delivery because underlying consumption is poor. As a result, basis values have eroded further, despite mills’ efforts to stabilise them

Market sentiment in the Italian steel sector is very negative. After the Italian mills decided to drop basis values to encourage orders, buyers report that their quotations are now being met by some North European producers. End-users are worried about their stock levels as all hopes of demand improvement, forecast earlier in the year, have been dashed.

UK service centres report they have a wide range of busy customers. Distributors’ sales volumes are well up on 2013 and, for some, the best in several years. Nevertheless, mill prices remain low. Indeed, they have continued to drift downwards, due to the strength of sterling, which is serving to attract material from mainland Europe and further afield.

There have been no major changes in the Belgian market, where demand is flat. Distributors report that end-users are endlessly shopping around to get bigger discounts. Stockholders from neighbouring countries are also competing for business. Delivery lead times from the steelmakers are extremely short.

There are signals that the Spanish economy is slowly reviving. New projects are coming on stream and some of those that were postponed during the financial crisis are being reactivated. It could be well into the final quarter before this improvement makes itself felt in the domestic steel industry, which, currently, is quite dull. Suppliers are, therefore, looking continually to export markets.

Source – MEPS European Steel Review – July Edition