Thu, 10 Oct 14:14:00 GMT
* Production contracts in all regions except East Europe, China
* Consultancy Meps sees a price revival in 2014
* Europe output down 4 pct as imports grow
LONDON, Oct 10 (Reuters) - A jump in Chinese stainless steel output drove global production of the alloy up to a new record high in the first half this year, despite weaker demand growth in the developed world and weak pricing, an industry report showed.
Global stainless steel production rose 4.6 percent to a record level of 18.6 million tonnes in the first half of 2013 from the same period last year, data from the International Stainless Steel Forum showed.
The rise was attributable to a 15 percent increase to 8.8 million in top producer China offsetting a dip in all other regions except Eastern Europe, a minor producer.
China's domestic stainless steel consumption is growing in line with its industrial production , which was up between 8.8 percent and 10.5 percent so far this year, said CRU senior analyst Mark Beveridge.
Stainless steel demand had been growing well above the industrial output level in the previous year.
"Chinese domestic stainless steel consumption growth is solid but is not 15 percent anymore. What pushed the overall output up is the increase in exports," Beveridge said.
Production of stainless steel, which is used in automotive, construction and to make home appliances, shrank 3.7 percent in Asia excluding China, to 4.3 million tonnes, in the first half.
Western European production contracted by 4 percent to 4.1 million tonnes in the same period.
"In Europe we are seeing higher import volumes this year which are taking away shares from domestic producers," Beveridge said.
The Americas produced 1.2 million tonnes, 1.9 percent down from the first half last year while eastern Europe saw a 12.4 increase but to a modest 207,000 tonnes.
Stainless steel prices have risen slightly in the last two months but are about 6 percent down on the year and about 50 percent down from their 2007 peak, according to the CRU index.
"Confidence should return to the market next year if, as expected, the economic climate improves," steel consultancy Meps said in a note.
"A rise in mill input expenditure is forecast in the first quarter. Consequently, the first half of 2014 could be the start of a sustained revival in stainless steel transaction values."
(Reporting by Silvia Antonioli; editing by William Hardy)