The group maintains that its previous forecast for western world output of 21.2 million tonnes is on target, which would represent a year on year increase of 4.4 per cent. Global supply, including the former command economies of China and Russia, is expected to reach 22.6 million tonnes - up by 6.1 per cent compared to 2003.
The main driver for this higher demand continues to be growing consumption in China. This has given a boost to many producers in the industrialised and emerging countries - particularly in Asia but also in many other regions, including Europe, Africa and South America.
But EU production has suffered. First quarter stainless melting was down by more than 2 per cent, mainly as a result of a strike at Acerinox - the principal Spanish manufacturer. A slight pick up is anticipated over the next three quarters.
A very modest improvement in output is anticipated in Japan this year. The first quarter turned out to be at a similar figure to the same period in 2003. Most steelmakers are finding it difficult to compete against lower cost Asian producers. However, they are now targeting customers transferring away from the 300 series into the 200 and 400 grades.
US producers are also encountering offshore competition. This threat leads us to predict little or no improvement in stainless melting this year.
South Korean steelmaking continues to roar ahead after Posco's substantial investment in stainless manufacturing. The outlet for most of the extra production is hot band into China to their subsidiary outlets and local re-rollers. We forecast stainless melting at 2.25 million tonnes in 2004 - up by a massive 22 per cent on the previous year's figure.
Taiwanese output increased during the first trimester. This should provide the platform for a 4 per cent rise for the full year - mainly based on exports to China.
MEPS envisages further growth in supply from the other countries, including Brazil, South Africa and India. However, this year's improvement is likely to be less dramatic than in 2003.
The steel industry is going through an historic period. In an earlier report, MEPS pointed out that prices for flat rolled steel products in Europe have now in most cases reached their highest level in the last two decades, a factor that has had a knock-on effect on the packaging industry.
According to MEPS, the upturn of the present cycle began in early 2002, but then lost a little ground as a result of the market uncertainty caused by the outbreak of SARS disease in Asia in 2003. But the explosion of prices since then has driven the value of flat steel in Europe to its current record high.
The analysis, published in MEPS' European Steel Review, focused on the German steel market, Europe's largest, to examine transaction prices.
Large amounts of stainless steel are used in food production and storage. The most commonly used grades are 304 and 316. In general, 304 is basically the workhorse grade while 316 is used in harsher environments.
An important reason fur using stainless steels is not so much the corrosiveness of the food itself as well as the fact that the use of stainless allows for faster and more efficient cleaning. For example in ice cream production 316 is specified so that strong anti-bacteriological cleaning and rinsing systems can be used.
One of the great advantages of stainless steel is that it imparts no taste to the food that it comes into contact with.