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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, California, USA, on March 21.
Global stainless volumes will also grow by 4% in 2013, with Europe dragging the trend down through a predicted 1% decline while the Chinese market looks poised to grow by 7%, 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 US industry "upstocked" by 50,000-60,000 tons in 2012, but this didn’t 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 said.
"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. Labour cost appreciation is going up dramatically and their electricity costs are artificially low right now," he said.
The North American stainless steel market will grow by 4% in 2013, down from 6% in 2012, according to forecasts by Austria’s Steel & Metals Market Research (SMR).