Global output of stainless steel long products, used mainly in energy and petrochemical industries, is set to return to pre-crisis levels in 2011 as demand recovers, a senior industry analyst told Reuters.

Output is expected to rise 15 percent this year after a 10 percent fall to 4.4 million tonnes in 2009, when the global economic crisis sapped demand, said Markus Moll, managing director of SMR-Steel and Metals Market Research.

'If new projects in power generation, energy and the petrochemical industry come next year, we can see additionally to the 15 percent of this year another (year of) healthy double-digit growth,' Moll said in an interview at Metal Bulletin's stainless steel conference on Thursday.

'We will reach and probably exceed pre-crisis levels in 2011 for long products,' he said.   

Worldwide sales of long products, which account for just under a fifth of total stainless steel output, halved to $15 billion in 2009 from $30 billion in 2007. These products include forged bars and shafts, rolled bars, wire rods as well as seamless tubes and pipes.

The sector's strong exposure to cyclical capital goods manufacturing makes it more vulnerable to economic shocks than the flat stainless steel products sector, which is supported by a more stable consumer goods manufacturing demand, Moll said.   

Therefore, fears the global economy may fall into recession again could slow recovery of the long product sector, he said.

'There is this ghost swinging around  -- of a double-dip recession. If it disappears by the end of this year ... then 2011 will be the time of release of these (big energy and power generation) projects,' he said.

China, India and other emerging Asian countries as well as Russia, which needs to revamp its energy infrastructure, will drive demand for long stainless steel products next year, while little if any growth comes from the European Union, Moll said.   

European steelmakers at the conference said they were under a growing competitive pressure from Chinese rivals. 

Roberto Marzorati, vice president of Italian steelmaker Cogne Acciai Speciali, said that while Asian producers appear to be taking over manufacturing of 'bread-and-butter' common products, European steelmakers should focus on value-added products tailor-made for customers to stay ahead of competition.   

European steelmakers said they also bet on expansion of nuclear power generation in the world and its revival in Italy after an over 20-year ban that followed the Chernobyl disaster in Ukraine in 1986. - Reuters