According to the annual report of Finland-based stainless steel producer Outokumpu, stainless steel demand in 2009 was heavily influenced by the global recession. The collapse in credit availability had an adverse effect on business conditions and created uncertainty, causing a reduction in business and consumer spending. As a result, many stainless steel users were forced to introduce a variety of both temporary and permanent production stoppages and cost reduction measures. These actions in turn reduced stainless steel demand significantly, and subsequently caused the stainless steel industry to operate at relatively low capacity utilization rates.
According to the report, global stainless steel end-user consumption fell by nine percent in 2009 following a decline of six percent in 2008. China was the only region to register positive growth in 2009 with year-on-year consumption increasing by 18 percent. Europe was the region worst affected, with demand down by 26 percent following a three percent fall in 2008. Demand in North America was down by 24 percent following a 19 percent fall in 2008. Global end-user consumption is expected to grow by 10 percent in 2010, with positive growth expected to return to all regions.
Demand performance in 2009 in industry-led stainless steel consumption segments was poorer than in consumer-related industries - which were harder hit by demand declines in 2008. The largest declines in demand in 2009 were experienced in the industry-related chemical, petrochemical, energy and process & resources end-user clusters. This was a reversal of the situation in 2008 where demand reductions were lowest in industry-led clusters and highest in consumer-related industries.
Long-term prospects for stainless steel demand remain robust. Austrian market research company SMR estimates that the average annual growth in worldwide stainless steel consumption will be 5.45 percent (CAGR) in the 2009-2020 period. Being a leading producer of stainless steel, Outokumpu is well positioned to capitalize on the worldwide growing demand for stainless steel.