HIGH-GRADE NI-CU-PT-PD-ZN-CR-AU-V-TI DISCOVERIES IN THE "RING OF FIRE"

NI 43-101 Update (September 2012): 11.1 Mt @ 1.68% Ni, 0.87% Cu, 0.89 gpt Pt and 3.09 gpt Pd and 0.18 gpt Au (Proven & Probable Reserves) / 8.9 Mt @ 1.10% Ni, 1.14% Cu, 1.16 gpt Pt and 3.49 gpt Pd and 0.30 gpt Au (Inferred Resource)

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Imbalance in stainless steel industry has led to tight margins: ISSF

posted on Jun 20, 2013 10:09AM

Imbalance in stainless steel industry has led to tight margins: ISSF

London (Platts)--18Jun2013/700 am EDT/1100 GMT

Stainless steel has shown the strongest growth of all the major metals, yet the supply/demand imbalance has made stainless a low-profit industry, John Rowe, secretary-general of the International Stainless steel Forum, said at a conference.

Growth in demand for stainless steel has averaged 5.5%/year since 1980 compared with 2.5% for other steels and 3.2% for aluminium. Production is projected to increase from 35.4 million mt in 2012 to 37.8 million mt in 2014 (a 4% increase) and to 40 million mt in 2014 (up 6% year on year), Rowe told last week's Harry Brearley centenary conference in Sheffield.

"Unless great care is taken to manage future investments, analysts are warning that the industry... may be at risk," Rowe said.

"Investors who are considering additional capacities have been warned to take care with their decisions."

Because of over-supply, some producers are operating at sub-optimal levels, while others are producing at fuller capacity and exporting their surplus. "This is an undesirable situation and it has the potential to lead to trade actions," which Rowe described as an increasing threat.

He presented figures showing that Chinese demand for stainless steel has increased from 10% of the world total in 2000 to a provisional 37% in 2012.

But China has nevertheless switched from being a net importer to a net exporter.

One of the options in an over-supplied market is restructuring, Rowe said. "For the first time chairman Xu Lejiang of Baosteel made a public appeal last week for government to relax its rules on foreign investment in the Chinese steel industry."

--Henry Cooke, henry.cooke@platts.com
--Edited by Jonathan Fox, jonathan.fox@platts.com