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Winter Is Coming, China’s export stainless steel prices will rise sharply?

Hot steel pouring at the steel plant

Recently, international commodity prices have continued to rise. It is normal for the United States to implement large-scale economic stimulus, and a large amount of hot money has poured into the market, triggering global inflation, and China has not been spared.

 

As we know, market terms usually have two aspects: one is a tangible hand (direct government intervention), and the other is an invisible hand (natural market regulation). The Chinese government announced today that China’s domestic commodity prices do not have a long-term basis for rising prices.

 

On April 9, Chinese Premier Li Keqiang hosted a meeting of economic situation experts and entrepreneurs. At the meeting, entrepreneurs reported that the sharp rise in international commodity prices has brought great pressure to rising corporate costs. The Prime Minister said: Strengthen market regulation of raw materials and other materials to ease the cost pressure of enterprises. In other words, the Chinese government will intervene in China's domestic commodity prices.

 

Then, on April 12, commodity prices fell sharply, and the Nickel Ore Index of the London Metal Exchange (LME)  fell by nearly US$500. The stainless steel futures prices continued to fall.

 

Stainless steel product futures prices have fallen. What is the performance of the stainless steel spot market?

 

Prices in the northern Chinese market are still maintaining a steady trend, and this state seems to have been maintained for half a month.

 

What is the reason for the continued stability?

 

1.After 1.304 cold-rolling resources are highly concentrated, the market will be affected by the shortage of certain specifications for a certain period by individual steel mills, resulting in shortages. For example, in the northern Chinese market, the recent shortage of 2.05/2.68/2.78mm cold-rolled sheet specifications is mainly caused by the insufficient supply of these specifications by some steel mills in the recent period. This situation is more common in the southern market, basically one price for one specification!

 

2. Steel mills opened continuously and steadily, and agents and traders followed suit. Compared with the trend of Lunnickel, the opening price of steel mills is more instructive to the spot market. Recently, steel mills have opened steadily. Although the market’s enthusiasm for “gambling” has been extinguished, the phenomenon of shortages has also made agents and traders more motivated to place orders.

 

3. More important reasons-hot rolled coils and plates will cancel the export tax rebate policy. In March, the official website of the minstry of industry and information technology of china released the "Continue to Strive, Go Forward Bravely, and Start a New Journey for the High-quality Development of the Steel Industry". In 2021, it is necessary to study and formulate a work plan to reduce production, and implement a policy of double control of production capacity and output to ensure that the national crude steel output in 2021 will decrease year-on-year. Judging from the relevant data of real estate, infrastructure, and manufacturing, steel consumption will likely increase year-on-year this year. If only crude steel output is compressed, steel prices will rise sharply. Therefore, the market rumored cancellation of the export tax rebate for sheet metal has a higher probability of being finally realized. If the 13% hot-rolled coil export tax rebate is abolished, the export price of hot-rolled coil produced in China will rise sharply. At the same time, the Chinese government continues to increase its efforts in environmental protection and requires Chinese steel companies to reduce production. These two policies will directly lead to an increase in the price of Chinese stainless steel exports, and international stainless steel prices will continue to rise.

 

Therefore, the author believes that China's stainless steel prices will continue to be stable and will rise after the Chinese government announces the cancellation of export tax rebate prices. Companies that need to purchase stainless steel from China, please place an order as soon as possible.

Quote

  1. The London Metal Exchange (LME) is a global trading center for industrial metals. Most of the world's non-ferrous metals are conducted on LME's three trading platforms.
  2. The minstry of industry and information technology of china: It mainly manages planning, policies, and standards, and guides the development of the industry, but does not interfere with the production and operation of enterprises.
 

PS: If you need to inquire about the price of a specific product, please click here. When making an inquiry, please tell us the width, hardness, thickness, tensile strength and other information of the stainless steel you need to ensure that you can get the most accurate quotation.

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