CARLSBAD, Calif. The North American stainless steel market will grow by 4 percent in 2013, down from 6-percent growth in 2012, according to forecasts by Austrias Steel & Metals Market Research GmbH (SMR).
The North American market will add 80,000 tons of production volume in 2013, SMR managing director Markus Moll told delegates at the MSCI Specialty Metals Conference in Carlsbad, Calif., March 21.
Global stainless volumes will also grow by 4 percent in 2013, with Europe dragging the trend down through a predicted 1-percent decline while the Chinese market looks poised to grow 7 percent, he said.
The North American market is unlikely to see much change from the "stagnation" of 2012, Moll said, but noted strong long-term fundamentals for the stainless industry as the housing sector slowly recovers and a "shale gas revolution" drives the process equipment end market.
The U.S. industry "upstocked" by 50,000 to 60,000 tons in 2012, but this didnt represent any notable change in the overall market, Moll said. "I would say basically the world is not overstocked," he added.
While "the Chinese have become cost leaders" in the stainless market over the past few years, with the "cost curve becoming flatter and narrower" as large-scale production comes online in China, this trend is likely to change, Moll noted.
"I think the cost curve is getting even narrower. Some mills will get even bigger, but getting bigger will not always give them a cost advantage. I would question whether the Chinese will be cost leaders by 2020. Labor cost appreciation is going up dramatically and their electricity costs are artificially low right now," he said.