Consultancy group MEPS has, with cautious optimism, forecast that stainless steel production growth in 2014 will be better than in 2013 for all traditional steelmaking countries and regions, including the EU, Japan, South Korea and Taiwan.

According to the consultancy, this will be the first time since 2010 that the following year’s growth exceeds the current year.

MEPS forecasts that worldwide output will increase by 4.6% in 2014 to 39-million tonnes, while the Southern African Stainless Steel Development Association forecasts global production growth of 6.5% to 40.4-million tonnes this year.

MEPS says China’s production, which was estimated to be 3.4 times more in 2013 than in 2006, could increase by 6.8% to 19.3-million tonnes in 2014.

By 2020, the country’s stainless steel output could exceed 25-million tonnes and its apparent consumption could surpass 20-million tonnes, according to the China Special Steel Enterprise Association.

A significant overcapacity is forecast for stainless steel, which will impact on use rates.

Global stainless steel production increased by 7.8% to 38.1-million tonnes in 2013, with all regions, except for Western Europe and Africa, achieving positive growth.

According to the International Stainless Steel Forum’s preliminary figures for 2013, Asia, excluding China, increased its production by 0.8% year-on-year to 8.8-million tonnes in 2013. Stainless steel production in China increased by 18% year-on-year to 19-million tonnes.

China has emerged as the stainless steel superpower, with its growth outpacing other countries or regions. More than a decade ago, Asian production overtook that of Europe and, in 2009, China alone produced more stainless steel than Europe.

Although the growth in Chinese production will slow from the rapid rate of recent years, it is still expected to show the fastest growth in the world.

South Africa produces about 500 000 t/y of stainless steel, of which only 150 000 t is converted locally into value-added products, with the balance being exported to 50 countries worldwide.

The country’s catalytic converter industry is the highest single consumer of stainless steel in South Africa. It is critical to the growth of the local industry, consuming about 30% of the primary material supplied to the domestic market by Columbus Stainless.

However, there is doubt over the long-term viability of the catalytic converter industry, which is South Africa’s biggest automotive component export business.

Engineering News reported earlier this year that the National Association of Automotive Component and Allied Manufacturers (Naacam) states that some global vehicle manufacturers have not renewed their contracts for the supply of catalytic converters from South Africa, as local components manufacturers receive fewer benefits under government’s new Automotive Production and Development Programme than under the Motor Industry Development Programme it replaced last year.

There is also a trend to move some production away from South Africa, owing to logistics costs and the spare capacity available in catalytic converter factories closer to major vehicle assembly plants.

To compensate for this trend, Naacam is pressuring the Department of Mineral Resources to charge a production tax on all platinum-group metals – a key raw material of catalytic converters – produced in South Africa.

The idea is to use it as an incentive to manufacture catalytic converters in South Africa, as local manufacturers could either receive a tax rebate or see the tax eliminated through a local value-add formula.

Naacam states that making South Africa the cheapest place to produce catalytic converters will also benefit the stainless steel industry, as exported products are channelled through a network of agents and group sales outlets operating in Europe, the Americas and the Middle East. Columbus CEO Dave Martin says the global stainless steel market remains weak, as demand is low and oversupply persists.

The group is reducing operational costs to remain competitive.

Locally, the company is targeting the infrastructural development projects that constitute the 15-year National Infrastructure Plan. Stainless steel is being supplied for the construction of State-owned power utility Eskom’s Medupi and Kusile coal-fired power stations, in Limpopo and Mpumalanga respectively, as well as for the Ingula pumped- storage scheme, in KwaZulu-Natal.

The applications of stainless steel supplied by Columbus Stainless include bunker and chute liners, chutes, chimney liners, heat shields and tanks for the water treatment plants at Medupi and Kusile, and liners for the surge chamber at Ingula.

The group is interacting with role-players in these infrastructure project teams and one of its successes to date includes having its 3CR12 utility ferritic stainless steel, a registered trademark of Columbus Stainless, used in the construction of State-owned freight logistics group Transnet’s fleet of coal and ore wagons.

Stainless steel is also reportedly being considered for the Passenger Rail Agency of South Africa’s passenger coach replacement project.

Martin also believes there is a case to be made for using stainless steel in solar parks, supplied as part of the Department of Energy’s Renewable Energy Independent Power Producer Procurement Programme, as well as in roofing, cladding and palisade fencing. Often, stainless steel is discarded on account of price perceptions, but Martin believes 3CR12 stainless steel could be a competitively priced material in these applications, as it offers low maintenance and has a long life cycle.