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Try the Free AI Search EngineAsia Steel Market: Stainless Production Up, China’s Output Down, Procurement Opportunities Emerge
In Asia, stainless steel production is increasing while overall steel output faces pressure. The trends are highlighted in the news articles “Global steel production fell by 5.9% y/y in October,” “Global stainless steel production continues to grow,” and “Pressure on steel supplies to China remains despite falling production“. While a direct relationship between these articles and the satellite observed plant activities cannot be explicitly established, the regional production shifts are evident in the activity data.
The mean steel plant activity in Asia shows a declining trend from June (32.0%) to October (23.0%), reaching the lowest level in the observed period. Jindal Stainless Hisar steel plant consistently shows high activity, significantly above the Asian mean. Conversely, Shandong Taishan Steel Group Co., Ltd. operates at activity levels far below the regional mean. JFE East Japan Works (Keihin) steel plant activity decreases steadily over the period, from 65% in June to 52% in October.
Steel Plant Name: Jindal Stainless Hisar steel plant
Jindal Stainless Hisar, located in Haryana, India, primarily produces stainless steel using electric arc furnaces (EAF). The plant has a crude steel capacity of 800 thousand tons per annum (ttpa). Satellite data reveals consistently high activity levels, ranging from 78% to 86% during the observed period, significantly exceeding the average activity across Asian steel plants. Considering the reported increase of Indian steel production mentioned in “Global steel production fell by 5.9% y/y in October“, this sustained high activity could reflect India’s growing steel output, especially in the stainless sector as “Global stainless steel production continues to grow” highlights Asian growth excluding China and South Korea.
Steel Plant Name: Shandong Taishan Steel Group Co., Ltd.
Shandong Taishan Steel Group, based in Shandong, China, is an integrated steel plant with a 5000 ttpa crude steel capacity. It utilizes both blast furnace (BF) and basic oxygen furnace (BOF) processes. Observed activity levels have consistently remained very low, ranging from 13% to 17%. Given the news from “Global steel production fell by 5.9% y/y in October” and “Pressure on steel supplies to China remains despite falling production” indicating a significant drop in Chinese steel production, it is plausible that the persistently low activity at Shandong Taishan contributes to and reflects these broader trends, though no explicit link can be established from the data.
Steel Plant Name: JFE East Japan Works (Keihin) steel plant
JFE East Japan Works (Keihin) is an integrated steel plant in the Kantō region of Japan with a crude steel capacity of 4075 ttpa. It employs BF, BOF, and EAF technologies. Activity at this plant has decreased from 65% in June to 52% in October. It is important to note that the BF and BOF processes were planned for shutdown by FY2023; the observed decrease may correlate to the phase out of these processes. While the article “Global steel production fell by 5.9% y/y in October” does not explicitly mention Japan, the general decrease in global production could be a factor; however, a clear connection cannot be established.
Evaluated Market Implications:
The sustained high activity at Jindal Stainless Hisar steel plant, coupled with the news of increased stainless steel production in Asia (excluding China and South Korea) per “Global stainless steel production continues to grow“, suggests a stable supply of stainless steel from India. In contrast, the low activity at Shandong Taishan Steel Group and the reported drop in Chinese steel production highlighted in “Global steel production fell by 5.9% y/y in October” and “Pressure on steel supplies to China remains despite falling production” indicate potential constraints in steel supply from China. The gradual decrease in activity at JFE East Japan Works (Keihin) steel plant, potentially tied to planned BF/BOF shutdowns, may moderately impact regional supply dynamics.
Procurement Actions:
Steel buyers should prioritize securing stainless steel supply contracts from Indian producers like Jindal Stainless, capitalizing on their stable and high production levels. Given the potential supply constraints from China, it’s prudent to diversify sourcing strategies and explore alternative suppliers in other regions. Negotiate long-term contracts with Indian suppliers to mitigate risks associated with potential price fluctuations due to global production shifts. Closely monitor the evolving situation in China and adjust procurement strategies accordingly.