The long-term prospects for the increasing use of stainless steel are positive. Stainless steel consumption has been growing in all geographical areas in the recent years. Growth has been fastest in the APAC region.
Global market with few big players
Outokumpu operates in the global stainless steel market. The market for cold-rolled products totaled approximately 30.5 million tonnes in 2019, of which Outokumpu’s market share globa lly was approximately 5%. Our cold rolled market share in Europe is approximately 28% and in the NAFTA region approximately 21%. Outokumpu is the market leader in Europe and the clear number two in the Americas with a market share of approximately 20% in the US. (Source: EUROFER, SMR)
In addition to Outokumpu, the largest stainless steel producers worldwide include Asian companies Tsingshan, TISCO and POSCO as well as European-based Acerinox and Aperam. Several Asian producers also manufacture carbon steel, while European manufacturers focus on stainless steel. (Source: CRU)
With a growing demand, the longterm market outlook is positive
The long-term outlook for stainless steel demand remains positive. Global megatrends, such as urbanization, climate change, and increased mobility combined with growing global demand for energy, food, and water, are expected to support the future growth of stainless steel demand. In 2019, the global steel production amounted to 1,870 million tonnes of which approximately 3% was stainless steel. (Source: CRU, Worldsteel)
The demand for stainless steel products is impacted by global, regional, and national economic conditions, levels of industrial investment activity and industrial production.
In 2019, global apparent consumption increased by 2.7% compared to the previous year. APAC contributed with a growth of 5.3% while EMEA and Americas shrank by 3.6% and 5.7% respectively. (Source: SMR)
Global real demand for stainless steel products reached 43.8 million tonnes in 2019, an increase of 1.5% from 43.2 million tonnes in 2018. The annual demand growth was strongest in the ABC & Infrastructure segment, increasing by 5% from 2018. Demand in the Consumer Goods & Medical and Industrial & Heavy Industries grew by 3% and 1%, respectively. Meanwhile demand in the Chemical, Petrochemical and Energy segment remained at the same levels as 2018, whereas demand in Automotive & Heavy Transport segment shrank by 7%. (Source: SMR)
Market environment remains difficult
In 2019, the European steel industry continued to suffer from the surge of imports and unprecedented price pressure caused by the US steel tariffs which continued to have a negative impact on stainless steel base prices and deliveries in Europe throughout the year.
The stainless steel industry has been burdened by overcapacity in recent years, especially in Asia. The global stainless steel production capacity of slabs increased in 2019 by roughly 4% to 58.8 million tonnes. The global utilization rate was assessed to have slightly decreased to the levels of 72% in 2019. As the production of stainless steel is capital intensive, producers generally seek to maintain high capacity utilization in order to maintain and improve profitability. (Source: CRU)
The global stainless steel production of slabs grew by around 1% in 2019 from the previous year, reaching 42.6 million tonnes. The output decreased in most of the regions including Europe and Americas, while it only grew in China by 9% and in Indonesia by 15% compared to 2018. (Source: CRU)
Stainless steel is sold either directly to end users or to stainless steel distributors, tube makers, and processors, such as steel service centers, who resell the products to end users. In 2019, 55% of Outokumpu’s stainless steel was sold directly to end-user customers. The remaining approximately 45% of sales were shipped to distributors and processors that stock and process stainless steel to serve end users.