Global stainless steel production was 27.6 million metric tons in 2007, a decline of 2.9% compared to 2006, according to International Stainless Steel Forum (ISSF) data. The decrease in production occurred in most stainless steel-producing areas although the Asia region and China showed increases in production

Stainless steel production increased in the first half of 2007 but then collapsed in the second half of the year after nickel prices dropped. “The (production) collapse occurred as the aftermath of the burst in the nickel price bubble,” ISSF says. Based on London Metal Exchange (LME) trading nickel prices rose 38% during the first half of last year to an average $36,195/metric ton ($16.42/lb) before dropping 8% during the second half to an average $33,325 ($15.12).

Asia now produces 60% of all the stainless steel in the world. In 2007, stainless steel production in Asia grew by 6.3% to 16 million metric tons, driven by China's 36% increase to 7.2 million metric tops. The strong increase in Chinese production is partially based on new capacity that came on-stream during 2007. The next-largest producer was Japan at 3.7 million metric tons. All other Asian stainless steel producing countries showed production declines of between 3-15%.

The Western Europe and the African region reported a 13.3% decrease in stainless steel production to 8.7 million metric tons during 2007 while the Americas reported a 15.2% decrease in production to 2.5 million metric tons. The Central and Eastern Europe region produced a total of 365,000 metric tons of stainless steel in 2007. While this was 3.0% lower than the previous year, the ISSF says “the region is of minor importance in global stainless-steel production.”