December 03, 2008

China SS output to rise by 23% in 2008 - Macquarie

It is reported that an analyst with Macquarie Group Ltd said that China, the world's biggest producer of stainless steel, may raise output 23% in 2008 because of strong domestic demand and plant expansions.

Analysts and traders said production output may rise to 9.1 million tonnes from 7.4 million tonnes in 2007. The increase would support Chinese demand for nickel and chrome, ingredients used to make stainless steel.

According to Macquarie, China, which overtook Japan as the world's top stainless steelmaker in 2006, is building new capacity for the alloy as demand from carmakers and kitchenware manufacturers rises. The country will become a net exporter of stainless steel in 2009.

Analyst Bonnie Liu said as long as producers make a profit, the government doesn't have the capacity to stop them from increasing output. He said recent recovery in stainless steel demand and increases in coking coal prices will boost nickel prices in a near term. Gains in Chinese nickel imports were a natural result.