Markets
The year 2008 has been featured by the reduction of demand, particularly in the second half of the year, as a result of nickel strong correction  and the collapse affecting the industrial activity in the fourth quarter.  The combined effect of these factors made 2008 the worst year in history for the stainless steel industry.

U.S. market
Regarding the US market in year 2008, productions have had downward adjustments to match the demand fall. Inventories of the service centres reached all time lows.
 
Apparent consumption for flat products decreased by 20% against the previous year.
Regarding long products, apparent consumption was 1.16% lower than in year 2007.

Asian market
For the first time in the last years, Asia shows a decrease of its stainless steel production, caused by the fall of local demand and the decrease of its exports tot he European and U.S. markets.
Even China productions, which has been the main engine of the area in the last years, have fallen with regard to year 2007, according to our estimates, keeping its factories with very low operation levels in the last quarter of the year.

World production
The stainless steel world production has dropped by 9% (according to our estimates), reflecting the above mention situation, which has affected all the production areas.

Nissan Steel increases stake to 15%
On the 4 February 2009 NIssan Steel, ACERINOX shareholder since its foundation, announced the increase of its stake to 15%, from its previous stake of 11.33%.
This increase was carried out by means of the purchase of 9,359,000 shares in the Stock Exchange.

Nissan points out that the purpose of this acquisition is to strengthen its relationship with ACerinox and help to find new collaboration areas for the future, apart from the development of its stake (30%) in the construction project of the Malaysia factory.

Outlook
Irrespective of the current situation off markets, demand and prices, The company feels optimistic regarding the future of stainless steel in the medium and long term, which they say will recover a growth rate similar to that accumulated in the last 58 years, close to 6% yearly.

Besides, there is a positive aspect derived from the fall of raw materials prices and it is that the stainless steel has now a new competitiveness which, undoubtedly will promote consumption in the medium term and the development of new applications.

The future consumption increased will be supported by the incorporation to higher development levels of highly populated countries, with current levels of per capita income in the threshold of development and small per capita consumptions of stainless steel.