The risk of a global recession starting in the second half of 2022 is heightened. In the West, substantial rises in energy expenditure will reduce consumer spending, increase costs in the manufacturing sector, and deter investment in steel-intensive infrastructure projects.  

Moreover, the Chinese property market remains in crisis. Nevertheless, Asian nations could prop up stainless steel production. MEPS forecasts that worldwide output will reach 58.8 million tonnes, this year. 

Chinese stainless steel making was higher than expected, in the second quarter of 2022. Despite the economic downturn, brought about by strict Covid-19 lockdowns at that time, total production was more than 8.3 million tonnes. However, the outlook for the third quarter is facing headwinds.  

A heatwave in the country is prompting local authorities to impose power rationing on industrial users. This may inhibit steelmaking activity and consumption by the manufacturing sector. Furthermore, many market participants believe that recently announced stimulus measures will be insufficient to revive the domestic property segment. 

Indonesian output is expected to continue rising in the second half of this year. Substantial investments in new steelmaking capacity are gradually coming on stream. Most of the material produced in the country is flowing into China, instead of Europe and the US, according to recently released trade data.