Automotive ferritic stainless demand to see increase in China

SteelOrbis Shanghai Due to increasing demand for ferritic stainless steel and the more competitive production costs in China, in addition to domestic Chinese consumers, overseas buyers have also commenced the search for qualified suppliers with a view to increasing purchase quantities in China. Meanwhile, these foreign buyers are also pushing local stainless steel manufacturers and research institutes to improve product quality, according to overseas standards and specifications. Due to its comprehensive advantages compared to austenitic and martensitic stainless, ferritic stainless steel is gaining in popularity across the world at the present time. Given the current situation of incredibly high nickel prices, austenitic stainless steel is proving too expensive for buyers, though its antirust and processing qualities are the best of the three types of stainless steel. In comparison, martensitic stainless steel's inadequacy, both in processing and anti-rust, limits its fields of application, although it is comparatively cheap (helped by the absence of nickel). Ferritic stainless steel is suitable for processing and high-temperature environments, while its anti-rust qualities lie between those of the other two. Therefore, the comparatively cheap nickel-free ferritic stainless steel is currently being welcomed in markets all over the world. In 2006, the Chinese annual output of automobile units was close to seven million, while the figure is expected to reach or exceed 8 million before 2010. According this forecast, the local annual demand for ferritic stainless steel will have reached 120,000 tons by that time. As the biggest domestic producers of stainless steel, Baosteel and Taiyuan Steel have made substantial progress in product research and output. In January 2007, Baosteel won German Volkswagen's biggest order for 409L (a specification of low-carbon ferritic stainless steel) totaling 1500 tons. This represents over 65 percent of Volkswagen's annual demand for this steel product in 2007. However, due to the overall low levels of technology, China's demand for ferritic stainless steel mainly depends on imports. Recently, with the common goal of creating a strong domestic base for the production of ferritic stainless steel used in automobile exhaust systems, six major domestic producers and institutes, including Baosteel, Taiyuan Steel, China FAW Group Corporation, along with three university and research institutes, signed an agreement for investment and research in the area of stainless steel technology. Furthermore, famous American auto-part manufacturers have started to make inquires in relation to Chinese ferritic stainless steel. The main focus of their interest are the specifications of 409L and 410. Such products can be produced in the USA. However, the US buyers choose rather to find similar cheaper but quality products in China. Due to their limited production capacity for the products in question, it has so far been impossible for local steelmakers to increase their output and expand their exports.