China’s declining steel supply became an opportunity for Indonesia
The United Kingdom-based steel analyst, MEPS, increased its global crude stainless steel production forecast to 56.8 million tones for 2021. It observed that Indonesia had also overtaken India to be the second largest stainless steel producer.
The stage for 2022’s growth
China was battered by an overwhelming power shortage from its government’s decision to cut carbon emissions, leading to a halt in steel production. The chain of calamities included a construction crisis, which left Evergrande neck-deep in debts. On the other hand, findings from MEPS revealed that Indonesia’s production soared this year. Mills in the country were expected to manufacture more than 4.5 million tones in 2021.
Taiwan’s steel production was projected to balloon to 925,000 tones in 2021. Similarly, for Japan and Korea, production is expected to increase by 20 and 12 per cent respectively. For Q2 2021, India’s steel output suffered a decline from the pandemic’s lockdown measures. Additionally, steelmakers had to contend with limited oxygen supplies as many were distributed to healthcare. Subsequently, Q3 2021’s improvement catalyzed increased production to make up for earlier losses.
Europe’s steelmaking was forecasted to reach a total of 7.06 million tones. Unkind weather in mid-year had less impact on steel production than initially envisaged. Moreover, European rolling mills reported full order books. Consequently, output figures for Q4 2021 were expected to be strong. In the United States, production was forecasted to reach 2.5 million tones, an up of more than 16 per cent year-on-year. However, the annual output was unlikely to return to pre-pandemic levels in 2022. Shortages of stainless steel, particularly cold rolled coil, will likely become a feature of the domestic market in the short term.
Global stainless steel production is set to grow next year, boding well for shipbuilding. MEPS forecasted an annual total production of 58.2 million tones in 2022 – an increase of 2.5 per cent. Steel production in Indonesia should continue to outpace India. Rises in other regions were instead projected to be modest. Buyers would naturally gravitate towards more attractive prices for their newbuilding orders.