China's stainless steel demand to decelerate in 2004

China’s stainless steel demand to decelerate in 2004

China's stainless steel demand is expected to slowdown this year due to government's efforts to tighten credit requirements for steel projects. Stainless steel consumption will rise just 10% this year from 4.2 million tons recorded in 2003, said Li Cheng executive president of the Stainless Steel Council of China Special Steel Enterprises Association. This rate will indicate a sharp slowdown compared with consumption growth of 12% in the first quarter of 2004, 31% in 2003 and 42% in 2002. Despite slowdown, stainless steel production marks an upward trend. Li stated that stainless steel production capacity is forecasted to reach 6.3 million tons in 2007 from 2.4 million tons currently. Increased stainless steel output has also boosted China's demand for nickel which is a significant ingredient for stainless steel. In 2003, demand for nickel rose to 127'000 tons. But high nickel prices will cool demand growth to 5% in 2004.