Stainless at 70 Mt: Pariser's Growth Story Has a Capacity Problem Buried in It

The stainless steel session at BIR's Malaga convention on 26 October produced a pair of numbers that sit awkwardly together. Demand growth of 3.8% in 2026 and 4.4% in 2027, and global production above 70 Mt in 2027, from Dr Gerhard Pariser of SMR – Steel & Metals Market Research. And, in the same presentation, roughly 15 Mt of planned new capacity in China, Indonesia and India by 2031 set against less than 10 Mt of incremental demand in those same countries.

Both are growth numbers. One describes a market expanding faster than copper or aluminium — Pariser called ~5% annual growth "extraordinary" for an industrial metal. The other describes a melting sector adding capacity twice as fast as output. The gap between them, roughly 5–6 Mt, is not a rounding error. It is the export surplus that has to land somewhere, and it sets the terms for everything else discussed in Malaga: trade defence, scrap flows, and the recycled-content ratio now under quiet pressure.

What the 70 Mt figure actually implies

Worldstainless put 2025 global melt-shop production at 64.2 Mt, up 2.1% on 2024. Applying Pariser's own growth rates to that base gives a less dramatic outcome than the headline:

Author's calculation. Pariser's "above 70 Mt" therefore rests on a higher 2026 starting point than a straight application of his demand percentages implies — a stronger H1 than assumed, or a different growth profile between years. That is a modest difference, but worth flagging: the forecast is slightly more bullish than the arithmetic of its own components.

H1 2026 data supports the direction. Global output reached 33.0 Mt, up 5.0%, with Asia at 28.3 Mt (+6.1%), China at 21.1 Mt (+7.1%), the EU at 2.9 Mt (−3.7%) and the US at 1.15 Mt (+3.2%). Growth is real; it is simply not evenly distributed.

The 72/9 split is a grouping, not a statistic

The most-quoted figure from the session — China plus Indonesia at 72% of global stainless production in 2026, up from 3% in 2000, with Europe down from 40% to 9% — needs one qualifier that most coverage will drop. Pariser's figure is China plus Chinese-controlled capacity in Indonesia. It is not China's national total plus Indonesia's national total.

The distinction matters for how the number should be read. Worldstainless's 2025 data shows China at 40.9 Mt of 64.2 Mt, or 63.7%, with Asia overall at 86%. The additional ~8 percentage points to reach 72% is Indonesian output, most of it from Chinese-owned or Chinese-linked mills in the Morowali and Weda Bay clusters. That is a defensible ownership-based grouping — arguably the more economically meaningful one, since those tonnes are directed by the same corporate decisions as Chinese domestic capacity. But it is a grouping, and anyone citing 72% as if it were customs statistics is misreading it.

The 9% European figure aligns closely with worldstainless's EU share of 8.8% in 2025, though Pariser says "Europe" where the statistics say "EU". Given the UK's residual stainless melting, the two are not identical; the approximation is harmless in a strategic narrative but imprecise as a datum.

Capacity twice as fast as output

This is the sentence that deserves more attention than it received: melting capacity is increasing twice as fast as production. The 15 Mt of planned Chinese, Indonesian and Indian capacity by 2031 against under 10 Mt of local demand growth is one expression of it. The two-to-one ratio is more fundamental, because it implies global utilisation falling even if demand forecasts are met.

The build-out is already visible in transactions rather than projections. Jindal Stainless commissioned a 1.2 Mtpa stainless melt shop in Indonesia in March 2026, taking group melt capacity to about 4.2 Mtpa, with a target of ~3.5 Mtpa of sales by FY29. That single facility accounts for roughly 1.2 Mt of Pariser's 15 Mt — an illustrative attribution on my part, not a figure he gave, but it shows the arithmetic is not abstract. Fastmarkets previously estimated Indian stainless capacity at 6.6–6.8 Mt in 2022 with plans for 9.3–9.5 Mt by 2030; together with Tsingshan-linked Indonesian expansion and Chinese mill additions, the 15 Mt aggregate is plausible.

Pariser's four challenges — geopolitics (including what he described as increasing BRICS dominance), global overcapacity, economic nationalism extending beyond conventional anti-dumping and countervailing duties, and unbalanced competitiveness between regions operating under different cost and regulatory regimes — are best read as one problem with four faces. A 5–6 Mt surplus has to be exported, and the destination markets are precisely those erecting the least predictable barriers.

The recycled-content squeeze nobody advertised

The most under-reported element of the session is the slow erosion of stainless's recycling rate. Recycled input into 300-series production is growing about 3% annually in absolute terms — but the recycled share is falling in China, in Indonesia and globally, with the world average now around 30%. Pariser's own word for it, in BIR's release, was "bleak".

This is arithmetic, not policy failure. Stainless is one of the few metals with a genuinely high inherent recyclability rate, and 300-series melts are conventionally charged with a large scrap fraction. But if melt output in China and Indonesia grows at 7% while recoverable obsolete scrap in those markets grows more slowly, the ratio dilutes. New Asian capacity is partly scrap-hungry and partly nickel-ore-fed, and the mix tilts toward primary units as the denominator expands.

The consequence is a structural pull on scrap trade. India is the largest importer of recycled stainless materials, drawing mainly from the US, EU and South Korea. The EU has crossed from net exporter to needing imports for its own melts — a significant reversal for a region that has historically been a global scrap supplier. Any friction on those flows therefore raises costs in Europe before it raises them anywhere else.

That friction is being legislated now. The revised EU Waste Shipment Regulation (EU) 2024/1157 applies most provisions from 21 May 2026, with the new export rules from 21 May 2027, generally prohibiting non-hazardous waste exports to non-OECD destinations unless authorised. Pariser flagged this explicitly as a risk to European stainless producers dependent on imported raw material. The tension is not rhetorical: a regulation designed to stop waste leaving Europe could tighten the feedstock balance of the European melts that remain.

Scrap: stable, but stable for unhappy reasons

Omar Al Sharif of Sharif Metals Group described 2026 stainless and special-alloy scrap markets as broadly stable — a stability built on geopolitical uncertainty, subdued industrial demand and cautious buying rather than on balance.

The regional picture is uneven in ways that matter to traders:

The pattern is a gradual regionalisation of scrap trade: Asian buyers increasingly source at home, while Europe turns importer and the US keeps more of its own material. That is a less efficient allocation than a globally integrated market, and it is happening just as recycled-content ratios are already under pressure.

One special-alloy detail deserves more than a footnote. Tungsten prices up more than 300% against the benchmark transforms the economics of sorting. Alloy scrap that was marginal to identify and separate becomes worth recovering at that price — and worth stealing or mis-declaring. It is a reminder that "special alloys" is not a rounding item within the stainless committee's remit, and that accurate identification and sorting capability is now a margin lever, not a compliance overhead.

What to watch

The demand story is credible; consumer goods, infrastructure, energy and industrial applications are all supportive, and stainless's growth premium over copper and aluminium is a real, decade-long trend. But the surplus is the more consequential variable for anyone pricing or trading the metal. Three markers will show how it resolves.

First, Chinese and Indonesian export volumes into Europe and India through 2027 — the level at which surplus capacity becomes a trade case rather than a forecast. Second, whether the recycled share stabilises near 30% or continues to fall; a further decline would tighten obsolete scrap availability in importing regions just as the EU's export rules bite. Third, the EU's own melt trajectory: H1 2026 was down 3.7%, and CBAM support for domestic producers only matters if they are producing.