This is an extract taken out of Metal Bulletin Weekly, 2010, on the trends of China’s Steel Future.

The stainless steel market in China has been undergoing a similar powerful growth to that of many other metals over the last decade, and the country has now soared to become the global leader in terms of both demand and production. In turn, this has now boosted its consumption of the raw materials such as Ferro-Alloys and Nickel to a similar top position in the world. Back in the year 2000, China’s raw stainless output was only 690,000 tonnes. However, this was just the beginning of a progressive investment in capacity that raised production to 7.5 million tonnes in 2007, according to the International Stainless Steel Forum (ISSF). Output dipped to 7.1 million tonnes in 2008, however, recovered strongly last year to reach 8.8 million tonnes – a 26.8% rise. With global production put at a preliminary 24.58 million tonnes, China accounted for nearly 36% of the total in 2009. Nevertheless, other sources estimate even higher production and market share. Major expansion projects now under way and coming up in the next few years mean that the country’s total melting capacity will reach 23 million tonnes by 2015, however other sources estimate this figure to be even higher.

The main aim of China’s stainless investments seem to be meeting rising home consumption, not exports, says Adam Panayi, metals analyst at Metal Bulletin Research. In fact, there is small incentive to export because Chinese domestic prices remain high relative to international markets. Since November, prices for 304 grade, 2 mm CR coil have risen from RMB 19,000/tonne to around RMB 24,500 ($3,587)/tonne in early May.

Although China’s exports of finished stainless are quite low, its exports of manufactured consumer goods have, of course, come to dominate large parts of the world, with substantial quantities of stainless exported in the form of finished home appliances and white goods. This sector is the largest market for stainless in China with some 40% of demand, serving not only exports but also the rising living standards of its own population. Industrial machinery and engineering is estimated to be the second largest market, with some 31% of demand, driven by continuing industrialisation. Architecture, building and construction consume about 22%, while transport accounts for 5%.