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SunSirs: Annual Analysis of Trend of Stainless Steel Plate in 2019

December 30 2019 16:56:39     SunSirs (Molly)

1. Price Trend

According to the SunSirs price monitoring, stainless steel in the first half of the year had a small fluctuations, but in the second half of year the prices go ups and downs . At the beginning of the year, the price of stainless steel was $1936.90 /ton. At the end of the year, it fell by 1.17% to $1914.23 /ton. The lowest price of the year was $1867.73 /ton on June 19. The overall price of stainless steel is weaker than last year, because it has been affected by higher steel mill inventory and social inventory, the price did not rise, until the nickel price exploded, stainless steel then slightly followed the rise, but the rise and fall of the range is not more than 10%. In November, the country's mainstream steel mills cut production. December is the traditional consumption of stainless steel low season, stainless steel in the iron and steel enterprises after routine maintenance may enter the situation between supply and demand.

2. Analyses of market condition

Peak season for the start of the New Year (Jan. –Feb.) : influenced by the nickel price rise, and the impact of the factory started after the Spring Festival, the stainless steel market demand slowly picked up, traders also actively quote, stainless steel price rose slightly.

Peak season is not flourishing (Mar. - Jun.): downstream stainless steel demand in the consumption peak season performance than expected, Wuxi, Foshan inventory continued to increase after the festival. The whole industry chain into the pattern of increasing supply, weak demand, stainless steel prices subsequently fall.

Higher nickel prices drive up stainless steel prices (July-Oct.): nickel prices jumped 40% in a row on supply concerns triggered by the earthquake in Indonesia, the resumption of an export ban in Indonesia, the resumption of a review of 17 mines in the Philippines and the recent shutdown of one of vale's nickel miners. The news of the ban in Indonesia in early September, coupled with a slump in nickel resources in the Philippines, sent nickel prices soaring nearly 20 percent again. Nickel prices jumped nearly 60 percent in two months to $20049.26. Upstream nickel surge, driving up the price of stainless steel. In addition, due to the accident in Wuxi in October, freight rates rose sharply, and the arrival of goods was delayed due to traffic congestion. Therefore, prices of stainless steel were generally raised in the spot market.

Waterloo in the fourth quarter (Oct.-Dec.): after the impact of the previous Indonesian ban on mining was gradually digested, nickel prices have been retracting since November. In the first half of the year, the crude steel production of stainless steel increased faster than the year before, and the consumption growth rate was slightly higher than the supply growth rate. However, due to the low base of last year, the overall supply still exceeded demand, inventory was high, combined with low demand season, and the price of stainless steel fell.

  2009-2019 stainless steel production in China

In 2019, China's production of stainless steel was significantly higher than previous years, with the highest output in nearly a decade. It is estimated that special steel production (excluding stainless steel) will reach 140 million tons in 2019, up 7.15 % year on year and accounting for 14 % of total steel production. Stainless steel crude steel production is expected to exceed 30 million tons, up 12.36% year on year.

As shown in the figure above, China was dependent on imports of stainless steel a decade ago, but since 2010, domestic production of stainless steel has jumped sharply, with net imports turning negative and mainly exports. According to incomplete statistics, the import of stainless steel in 2019 is expected to be 1.15 million tons, a year-on-year decrease of 700,000 tons, a decrease of 37.84%; Exports were 3.6 million tons, down 400,000 tons or 10% year on year.

  

       Apparent consumption of stainless steel from 2009 to 2019

Apparent consumption of stainless steel in 2019 was also the highest in nearly a decade. The apparent consumption of stainless steel in 2019 is expected to be 24.6 million tons, up 15.15 percent year on year. In the stainless steel variety structure, the proportion of 300 series stainless steel is 47.7%, with a year-on-year increase of 2.24%. The proportion of 400 series stainless steel was 17.51%, 3.04% lower than the same period last year. 200 series stainless steel accounted for 34.13%, a year-on-year increase of 0.78%. The output of super austenitic stainless steel and nickel-based alloy increased greatly and replaced imports.

3. After-Market Prediction

To sum up, stainless steel production reached a record high in 2019, dragged down by high inventories, although nickel prices soared to nearly 60% for the year, while stainless steel rose by around 10%. In addition, due to the impact of the trade war in 2019, export volume has also dropped significantly, further dragging down the demand for stainless steel. In 2020, the economy is still in a downward cycle, so it will be difficult to effectively boost the demand for raw materials. Nickel prices are expected to fluctuate slightly in the second half of 2020 due to the ban on nickel mining in Indonesia, while stainless steel prices are expected to fluctuate slightly in the first half of 2020, and may rise in the second half of the year with a price range of $1790.11- $2148.14 /ton.

If you have any questions, please feel free to contact SunSirs with support@sunsirs.com.

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