Market participants are expecting China’s stainless steel production in the July-September quarter to be lower than in April-June because of mills carrying out maintenance work.

“Third quarter production will likely be lower than in the second, with first quarter output likely to be the highest quarterly production this year,” a stainless analyst with Beijing Antaike Information Development Co tells Steel Business Briefing. This is due to planned maintenance work by major producers, which will lower production in the current quarter, she says.

A Shanghai-based commodities analyst also expects third quarter stainless production in China to be lower than in the second quarter. In tandem with scheduled maintenance work, mills are also compelled to cut production due to thin profit margins caused by falling stainless prices, she says.

China’s largest stainless producer, Shanxi Taigang Stainless Steel, is planning to carry out maintenance work on its melting facilities in July and August, a company source tells SBB. Taigang’s stainless output was around 210,000 t in May, but production in June was less than May’s level, the official says. An exact production figure for June is not yet available, but the executive adds that July’s output is expected to be even lower than June’s.

An official at Baosteel Stainless tells SBB that the steelmaker plans to carry out maintenance work in July which could clip its output by 10,000-20,000 t this month. Production was around 105,000 t in June. “Orders are not good now, hence the maintenance and production cuts by mills, which should help ease high market inventory levels,” he notes.

Lianzhong Stainless Steel is not planning any major maintenance in the near-term and is producing according to orders received, a company official tells SBB. He notes that there are fewer orders for June compared to a few months back, and while it is too early to say how July’s output and orders will differ from June’s, the official doubts that orders will reach the levels seen in April and May.    不銹鋼板材 不锈钢板材stainless steel plate

China crude stainless output      不銹鋼捲   不锈钢卷 stainless steel coil

Source: China Stainless Steel Council     不銹鋼鋼板 不锈钢板stainless steel sheet

  '000 tonnes

1Q09  1,769 

2Q09  2,299 

3Q09  2,502 

4Q09  2,235 

2009  8,805 

1Q10  2,435 

Source: SBB      不銹鋼扁鐵 不锈钢扁铁 stainless steel flat bar