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Stainless steel-The supply side tends to be loose, and the cost is expected to continue to fall

In April, the overall performance of China's high-carbon ferrochromium quotation showed a rise and a fall. The current quotation in the mainstream market in China is about 7,900 yuan/50 basis tons, a cumulative monthly decline of 5.95%. The decline in the ferrochrome market is mainly due to the expected impact of power curtailment and environmental protection in Mongolia in the main production area. At the same time, stainless steel mills have intensified losses in some steel grades, which forced a reduction in production, thereby reducing part of the demand for ferrochrome. As the supply and demand of ferrochrome deviates from expectations, it is expected that the high-carbon ferrochrome spot market may continue to fall from high levels in May.

 

In terms of ferronickel, the trend of China's high and low ferronickel prices in April diverged. It was reflected by a slight decline in low ferronickel, while low ferronickel was relatively strong. The monthly average monthly growth rates of high and low ferronickel were -5.63% and 5.26%. 

 

The fall in the price of high ferronickel, on the one hand, the low level of nickel, will suppress the atmosphere in the ferronickel market; on the other hand, the supply of ferronickel in Indonesia will continue to increase, forming a negative feedback on the Chinese ferronickel market. As ore prices fall under pressure, the cost support of high-ferronickel may weaken, and the commissioning of new ferronickel projects in China will not be conducive to the subsequent strengthening of high-ferronickel prices. It is expected that the high-ferronickel market in May may Maintain a weak callback.

 

In April, the overall performance of the low-nickel iron market remained stable. It is mainly affected by the low circulation of low-nickel iron and the increase in outsourcing of low-nickel iron by individual steel mills, which supports the low-nickel iron market. With the subsequent reduction of 200 series steel mills, the pressure to switch to production increases , For low-nickel iron demand will decline. It is expected that China's low-nickel iron market may continue to fall in May.

Stainless steel market price

China's stainless steel spot price (yuan ton)

In April, the trend of stainless steel spot prices showed a resonant high fall. The monthly average monthly prices of 304, 201 and 430 cold rolling were -1.28%, -0.24% and -4.90% respectively.

 

Judging from the performance of the spot price of each department in the month, 304 showed a steady and slight decline. The trend of 304 was mainly affected by the cost superimposed demand factors. The correction of the market of nickel and ferrochrome has driven the cost of 304 to drop; overseas The recovery of supply capacity has led to a decline in China's export demand for products. The decline in the 201 market was mainly due to the divergence of supply and demand. China's 200 series production was released at a high level, but the corresponding demand side did not improve. The continuous decline of the 430 market is, on the one hand, affected by the fall in the price of ferrochrome at the cost end; on the other hand, driven by the continued high profits, the output of the 400 series has continued to increase.

 

It is expected that in April, China’s stainless steel market will continue to change in common. Under the expectation that the high cost will fall, the price of each department may fall, the 201market may slow down, and the 304 and 430 prices may still fall Compress the profit stage.

Stainless steel inventory

300 series stainless steel inventory (10,000 tons)

According to incomplete statistics, as of mid-April, stainless steel stocks in the north and south were 871,700 tons, a month-on-month decrease of 7.875%. On the one hand, the decline in inventory is caused by the structural contradiction between supply and demand. In addition, steel mills also have an impact on the arrival of the southern market, which is mainly reflected in the decline in inventory of the 300 series in the northern and southern markets.

 

In terms of inventory of the 300 series in the southern and northern markets, the inventory in mid-April remained at 466,500 tons, down 14.69% from the end of March. The 300-series cold-rolled and hot-rolled products in the northern market dropped overall, and the 300-series cold-rolled inventories in the southern market dropped significantly. The current market 300 series specifications are tight, it is expected that the 300 series inventory in the later market is expected to continue to decline.

Stainless steel supply

Stainless steel output (10,000 tons)

In March, China's stainless steel output was 3,327,46 million tons, a month-on-month increase of 25.88%. Among them, the output of the 200 series was 1.143 million tons, an increase of 43.498% from the previous month; the output of the 300 series was 1,486,200 tons, an increase of 19.85% from the previous month; the output of the 400 series was 698,200 tons, an increase of 15.18% from the previous month.

 

In March, China's 300 series stainless steel crude steel output was 1,486,200 tons, an increase of 19.85% month-on-month and an increase of 26.58% year-on-year. The month-on-month increase in the production of China's 300 series was due to the low production base in February. On the other hand, the continued profitability of the 300 series combined with the concentrated release of demand stimulated the growth of steel mills. It is expected that the overall output of 300 series stainless steel in April may show a slight increase, while the output of 300 series stainless steel may remain stable in May.

Outlook

It is estimated that the cost of 304 hot rolling for Chinese stainless steel plants in May will be around 13,900 yuan/ton, and the market spot price will be above 14,900 yuan/ton, and the profit on the spot side will continue, and the corresponding steel mills’ prices in May will be 14800-15200 yuan/ton. In the interval, some steel mills’ steelmaking profits in May are still relatively large.

 

Under the influence of the continued profitability of steel mills, it is expected that the supply of China's 300 series will continue to grow in May. Under the current high basis environment, steel mills' delivery demand may slow down, and the supply side will gradually become loose; overseas supply will recover. The dependence of overseas product demand on the Chinese market has been weakened, which will not be conducive to the strengthening of China's watch demand.

 

The sharp drop in the bidding price of ferrochrome by steel mills means that the market’s early expectations are gradually fulfilled, and the later cost factors are gradually turning to ferronickel. After the rainy season in the Philippines, the supply of nickel ore will tend to be loose. Conducive to the support of the 304 cost end. The supply and demand of the 300 series may tend to deviate in May, which will form negative feedback on the 304 spot market. The current 304 cold-rolled basis is more than 1,000, and it is expected that the market performance in May will be mainly in a narrow range, or will pass the continuous negative Fell to fix the basis.

 

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