Global stainless steel production hits 4-year low

Global stainless steel production is projected to reach 47.2 million tonnes per year in 2020. After four years of continuous growth, this would represent a drop of nearly 10 percent from last year. The slowdown is mainly due to the Covid-19 pandemic and measures taken by authorities around the world to limit its spread.

The aftermath of the coronavirus outbreak affected market activity in March 2020. Global production declined nearly six percent year on year in the first quarter.

Restrictions applied by national and local governments in many stainless steel producing regions were most severe between April and June. According to MEPS estimates, global production was about 20 percent lower than in the same three months in 2019.

In Europe, despite significant production cuts at the peak of the pandemic, many participants in the supply chain continue to report weak orders. As a result, most stainless steel producers are closing for their traditional summer holidays. Consequently, the seasonal decline in production will be recorded as usual. After that, a gradual increase in activity is expected.

In the United States, production is estimated to have dropped significantly in the second trimester of 2020. A slow recovery is expected, but this could be hampered by the continued spread of the coronavirus in this country.

India is expected to see a significant decline in production in the second and third quarters of 2020. Strict lockdown measures have been implemented to combat the transmission of Covid-19.

In China, where the effects of the coronavirus were first reported, there was a severe decline in production in the first months of this year. Production is expected to return to near-pandemic levels by the end of 2020.

South Korea and Taiwan are expected to report relatively moderate production cuts between April and September. Production in Japan is estimated to have dropped significantly in the second quarter. By the end of the year, all three countries are projected to recover similar performance to those recorded in 2019.