Just under 7.5 mmt of stainless steel was produced during the first quarter of 2010, almost the highest ever volume for the first three months of a year. All areas of the world contributed to the increase in production with The Americas leading the way. Nevertheless, a comparison with Q1 2009 is strongly impacted by the extraordinary low production level in Q1 2009 due to the crisis: the apparent increase in production by 54.6% cannot be sustained throughout 2010. ISSF has previously noted that a recovery began in the last two quarters of 2009 as production began to return to normal levels.

While impressive, the year-on-year comparison should be reviewed in the light of the following points:

1.Production in the first quarter of 2009 was almost the lowest in a decade due to the effects of the global recession which was followed by heavy de-stocking.

2.The global economy began to recover in the second half of 2009 and manufacturing activity in stainless-using industries, such as the automotive sector, is increasing.

3.After a very strong de-stocking in 2009, better market conditions may encourage many fabricators and stainless steel stockholders to replenish their stocks.

ISSF expects that the stainless industry on a world basis will continue to return to its normal production on a reasonable level over the following quarters of 2010 and 2011. For the full year, ISSF expects around 11 to 12% increase in the volume of stainless steel production.