Stainless steel in 2023 or a rebound after the fall

Beijing, January 12 (Xinhua Finance) -- Data from Zhuochuang Information (49.320, 0.44, 0.90%) shows that the annual average price of 304/2B stainless steel coil market in 2022 in China is 18,736.15 yuan/ton, up 1.91% from 2021 average price. The year's high came in early March, when changes in the futures chart played an important role in the first half of the market correction. The year's low price came at the end of August, and logistics constraints and changes in demand had a significant impact in the second half of the year. The annual price difference between high and low points is 6550 yuan/ton.

The annual price trend is roughly divided into three stages, the first stage (January to March), the shock rise stage, stainless steel production enterprises actively reduce production, overhaul to drive the market atmosphere, superimposed demand volume and futures rise driven, this stage market price increased 26.75%. The second stage (from April to August) was the weak and declining stage. Under the background of limited logistics stage, the influence of traditional off-season demand increased, and the combined cost support decreased, and the market price in this stage decreased by 28.35%. The third stage (from September to December) was the stage of strong shocks. Although market logistics continued to be limited, the price of some raw materials increased, combined with optimistic economic data, and the demand showed a certain improvement. In this stage, the market price increased by 5.44%.

2022 stainless steel supply drop expected to rise in the afternoon

Statistics from Zhuochuang Information show that the supply of stainless steel in China is expected to reach 29.396,700 tons in 2022, down 10.35 percent from last year.

In 2022, China produced 27.3803 million tons of stainless steel. From the perspective of monthly output changes, March, April and the fourth quarter were the stages of high output, which coincided with the obvious recovery of production profits. In other periods, the output was relatively low, mainly due to the continuous impact of insufficient demand and crude steel reduction work.

China's stainless steel imports in 2022 are expected to be 1.389,700 tons. Although the domestic atmosphere is optimistic in the first quarter, the high market price drives the import enthusiasm to a certain extent, but the limited logistics dragged down the digestion of goods. Then the market all the way down, weakened the import operation willingness, weak demand also weakened a part of the consumption.

China's stainless steel production is expected to rise to about 29.17 million tons in 2023, with an increase of 6.52%. Mainly considering the continued release of new capacity, as well as the early production of enterprises to further achieve production, driving production began to rise. In addition, as the impact of crude steel reduction work is further weakened, the overall production load of steel plant is expected to rise. In addition, with the further return of low-cost resources after domestic enterprises build factories overseas, it is expected that the import volume of stainless steel in China will rise to about 1.82 million tons in 2023. Affected by this annual supply or rise 8.01%, the stainless steel market price or form a certain drag.

2022 stainless steel demand shortfall is expected to grow later

Statistics from Zhuochuang Information show that the demand for stainless steel in China is expected to reach 28.633,600 tons in 2022, down 10.97 percent from last year.

In 2022, the total consumption of stainless steel in China was 24.3478 million tons. Under the background of limited domestic logistics and production, domestic stainless steel downstream consumption is limited, and the overall consumption is at a low level.

China's stainless steel reserves are expected to be 4.285,800 tons in 2022. Weak domestic demand increases the enthusiasm of some enterprises in export operation, but the main manufacturing countries are also in a relatively insufficient demand, limiting their demand for China's stainless steel raw materials.

China's stainless steel consumption is expected to rise to about 26.71 million tons in 2023, with an increase of 9.69%. The main consideration is that the current demand for infrastructure investment is expected to remain strong. At the same time, driven by various policies to stabilize the housing market, the downstream demand represented by real estate has reached an inflection point, which jointly drives up the downstream consumption of stainless steel. Although the demand of some developed economies is expected to weaken under the expectation of tighter global financial liquidity, which may drag down their demand for our stainless steel products, from an overall level, China's stainless steel exports are expected to remain at about 4.4 million tons in 2023. Affected by this annual demand or rise 8.67%, the stainless steel market price support.

Cost support is expected to be weak

In stainless steel production in 2022, nickel cost was high in the first half of the year, with nickel accounting for an average of 52.12% and a peak of 55.96%. Strong cost support. In the second half of the year, nickel cost decreased significantly, nickel accounted for an average of 51.14%, the lowest fell to 49.45%, the cost support declined significantly.

Insufficient cost support is expected in 2023. Taking into account the overall speculation of the news gradually fades, the late nickel market supply growth concerns are expected to rise, in nickel market rational fall expectations, nickel plate, nickel iron and other raw materials weak or stainless steel production costs formed a certain drag.

Prediction: The trend of stainless steel in 2023 is expected to be stronger, but the average annual price or difficult to rise effectively

Zhuochuang information is expected in 2023 China's stainless steel market or show a rebound trend after the fall, the second half of the year to support the rise of expectations, the market price is expected to rise. On the one hand, the Fed's interest rate hike is expected to slow down or even turn to lower interest rates, and liquidity is expected to hit a turning point. On the other hand, concerns about the increase of raw material supply represented by nickel are rising. In addition, as new production capacity continues to be released, and the impact of crude steel reduction work is weakened, stacked with low-cost resources of overseas factory enterprises to return to China, the supply is expected to rise. It should also take into account that the overall demand for domestic infrastructure investment is expected to be strong, and the downstream demand represented by real estate may usher in an inflection point. Under the game between short and long, the trend of the stainless steel market is expected to be gradually stronger, but the average annual price center of gravity or relatively low.