In 2020, China’s stainless steel crude steel output is expected to reach 34.1 million tons, an increase of 2.24 million tons compared to 2019, an increase of about 7%. In 2020, China’s apparent consumption of stainless steel reached 28.54 million tons, an increase of 3.04 million tons compared to 2019, an increase of 12%.
What is apparent consumption? apparent consumption means output plus net imports. For example, the apparent consumption of steel is the sum of national steel production plus net imports, but not all of these steels may be consumed.
What is the main reason behind the increase in demand?
In April 2020, due to the impact of covid-19, the price of stainless steel in China’s stainless steel market was at its lowest level in the past five years, and factories began to reduce production. At the same time, a large number of dealers and traders began to stock up. In late May, with the recovery of the downstream market, the demand for stainless steel broke out!
Insufficient supply of stainless steel, coupled with the influence of factors such as LME nickel futures, has caused stainless steel prices to continue to rise. Entering 2021, stainless steel prices are still rising due to market inertia.
However, downstream stainless steel companies, such as kitchenware and home appliance factories, are no longer willing to purchase stainless steel in large quantities.
Reason
1. The price of stainless steel is too expensive. Downstream factory costs are too high.
2. Due to the approaching Chinese New Year, a large number of downstream factory workers will have early holidays. Also, due to the impact of covid-19, workers’ holidays will be extended and factory production will drop.
3. Insufficient consumer demand for stainless steel products.
As a result, the price increase of 304 cold-rolled stainless steel in the Chinese market has slowed down, and there has been a slight decline.