In the case of weak demand, as manufacturers try to reduce the impact of price declines, measures to reduce stainless steel production are expected to become more common.

After the purchase of procurement activities in the first quarter of the first quarter, the price fell, and MEPS lowered its global rough stainless steel output forecast throughout the year from 800,000 tons to 59 million tons in the previous quarter. This will increase by 6.8%over 2022 output.

Manufacturers are now exploring mechanisms that can be used to re -balance supply and demand, especially in Europe and Japan. A European factory has implemented temporary suspension, and other factories are expected to start to maintain interrupt or short -term working model. MEPS sources said that the production capacity of Japanese steel mills has been greatly lower than its maximum production capacity and may be further reduced.

Since July 2022, the euro zone manufacturing PMI has been lower than 50. Since November 2022, the same benchmark indicator in the United States has been less than 50. The US market is slightly higher than Europe. Its manufacturing purchasing manager index rose 0.8 points to 47.1 from April. EU numbers fell 1.5 points to 45.8, while the Chinese index fell 2.7 to 49.2.

In 2023, the EU stainless steel output MEPS forecast was reduced to 6.2 million tons. Despite the sharp decline since the end of 2022, EU energy costs are still at a historic high. Inflation and interest rates also remain high. The German economy officially entered a decline in May. These factors have a negative impact on stainless steel demand.

In this context, stainless steel inventory is high in the European supply chain. There is not much interest in buying a lot. The distributor is trying to sell the inventory purchased at the end of 2022 and early 2023. Sales that are not profitable have caused people to worry about the solvency of some enterprises.

Although the East Asian market is still sluggish, South Korea's annual forecast has been adjusted to 2.13 million tons. This is due to POSCO's steelmaking facilities restored to production, which was destroyed by Typhoon Hinnamnor in September 2022.

In China, the expected demand for the Lunar New Year holiday has not been realized so far. People have doubts about China's economic recovery. In 2022, the construction area under construction decreased by more than 7%year -on -year. From the beginning of the year, as of the end of April, this number has still decreased by about 6% year -on -year. China GDP is expected to increase by 5.4%in 2023.

MEPS predicts that by 2023, the consumption of stainless steel in the United States will decline less than Europe. In the first quarter of 2023, imports in the United States fell 43%year -on -year. The decrease in competition is expected to increase the demand for domestic stainless steel.