China's explosive growth in stainless steel production capacity will accelerate industry consolidation in higher-cost producing countries such as Japan, says the chief of the regional scrap recycling unit of Australia's Smorgon Steel Group.
'China is an enormous importer of stainless steel and they will not stop growing their production until they can cover their demand themselves,' said Stephen Hartwell Greer, chief executive of stainless steel, copper and aluminium scrap seller Smorgon Hartwell Recycling.
The country is projected to become a stainless steel net exporter in a few years, given output is expected to jump from 2.8 million tonnes to 8.1 million tonnes in 2010, according to British metals recycling firm ELG Haniel Metals' forecast quoted by industry media Steel Business Briefing.
By next year, China will be producing 25 per cent of the world's total volume of the alloy, China Iron & Steel Association forecasts.
And like the steel industry as well as many other manufacturing industries - from cement to cars, over-capacity is a major concern on the mainland.
Mr Greer said high-cost producers such as Japan would soon find their stainless steel exports to China replaced by local output.
