Outokumpu expects China’s stainless market to improve in Q4

Outokumpu expects the Chinese stainless steel market to perform better in the fourth quarter of 2013 compared with the year’s first two quarters, which saw prices fall over a five-month period.

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Its optimism is underlined by the price rebound in the third quarter and the return of buyers to the market, its Asia-Pacific president Austin Lu said in a recent interview.

“We saw the stainless steel market rebound a bit in the third quarter, following China’s positive economic data such as its purchasing managers’ index. Demand among our customers, as well as their confidence in the market, strengthened as well, which led them to replenish their stocks.

“Therefore, we believe the market will be better in the fourth quarter than during the first half,” he said.

Industries including energy, petrochemical and transportation will be the main drivers for the increased consumption, Lu opined.

“We will still focus on industries that have strict requirements or high standards when it comes to the performance of materials, such as large energy projects or those related to infrastructure, as well as transportation,” he said.

“One thing we can say for sure is that stainless steel is not a sunset industry but one that is on the rise. I believe this will not change,” Lu emphasised.

He also added that many market watchers are expecting consumption in China to rise 5-6% every year until 2020.

Lu pointed out that stainless steel makes up only a small proportion of the entire steel industry in China now, at about 5%.

But he said that is set to change as stainless steel applications expand to encompass everything from everyday items like cutlery to high-end industrial equipment, such as those used in pharmaceutical factories, nuclear power plants, ships and high-speed trains.

“Stainless steel will be used to replace parts that are not environmentally friendly or recyclable, or those that are produced through energy-intensive processes. It will be used to provide more economical and lasting solutions for these industries.

“The development of specialised stainless steel products is growing at a faster pace than that of conventional stainless steel. That is why we are focusing on this area to set ourselves apart,” Lu explained.