Table of Contents

Stainless Steel Coil Status and Forecast 2023

In the first quarter of 2023, the stainless steel supply and demand are very weak, and raw material prices continue to fall; the second quarter of consumption continues to be weak, inventory stock declines, and the market price has rebounded. Still, the transaction failed to continue, and then prices fell back.

The price in the second half of 2023 will first fall and then rise; the third quarter of the raw materials will bottom out, downstream and traders inventory may increase, turnover growth, prices may rebound; the fourth quarter of the weak demand at home and abroad, stainless steel prices will be a downward trend.

Stainless Steel Coil Status and Forecast 2023

2023 first-half price trend review

1.1 Analysis of domestic price trend

Stainless steel prices in the first half of the year were on a downward trend. In the first quarter, most of the steel mills in January overhaul, while traders are more optimistic about the market after the Spring Festival, unwilling to lower prices for shipments; since February, due to the transaction recovery being less than expected, the cost of raw materials ferronickel fell back, traders inventory pressure is significant under the stainless steel finished product prices also began to fall back.

In the second quarter, starting in April, the previous orders began to deliver, the trade side and the downstream centralized purchasing phenomenon, the transaction of the short-lived recovery and the recovery of raw material prices, to promote the cost of finished products; May from the transaction overall weak, the trade side of the attitude of caution, the willingness to low inventory, low inventory pressure, the price of the slow downward adjustment.

1.2 Cost-profit analysis

2023 first half, the overall weakness of raw material prices, the cost line has moved down:

300 series stainless steel materials, steel mills’ cost line continues to fall; there is a particular profit margin, but the trade side of the profit margin is limited, and most of the losses;

200 series, there is a certain profit space, although the consumption recovery is limited; 200 series mainstream steel mills joint sales price restrictions on the agent, raw material prices down, so 200 series, there is a certain profit space;

400 series demand is not much, the price is down, and the overall loss is significant; in June, a stainless steel plant was for overhaul and production reduction; the price has rebounded, and the general loss has been reduced.

Stainless Steel Coil Status and Forecast 2023 china

Review of the basic situation in 2023

2.1 Supply structure and change trend analysis

In the first quarter, the steel mill was for routine maintenance, market consumption was insufficient, and under the influence of inventory pressure, the overall production declined compared with previous years; into the second quarter, raw material prices fell, and profit levels were repaired to a certain extent. In contrast, the inventory has been digested, and the steel mill production gradually recovered and maintained a relatively high level.

Cold rolled, mainly with the crude steel production changes to change, the first half of 2023 200, 400 series overall consumption is weaker than the 300 series, steel mills cold rolled production also increased with the crude steel, 200 and 400 series of changes in the magnitude is limited, the second quarter of the incremental increase is more concentrated in the 300 series.

2.2 Import and export trend analysis

In 2023, affected by the overall poor consumption at home and abroad, stainless steel imports and exports have fallen significantly.

According to China Customs data statistics: January-May this year, the cumulative volume of domestic stainless steel imports of about 724,700 tons, a year-on-year reduction of 689,000 tons, a reduction of 48.7%, the overall decline, mainly concentrated in India, South Korea, and Russia three countries, in addition to South Korea POSCO to resume production, the total amount of stainless steel exported to South Korea since the second quarter gradually decreased.

January-May domestic stainless steel imports accumulated a volume of about 724,700 tons, a year-on-year reduction of 689,000 tons, a decrease of 48.7%. Of the poor overseas demand, Indonesia projects more than a reduction in production; the return of resources has been reduced, and the main importing countries are still Indonesia, Japan, and South Korea.

Summary: the first half of the year by the domestic and foreign environment, demand decline, and poor enterprise sales; the first quarter as a whole was a weak situation of supply and demand; prices continued to fall; the second quarter of the market consumption recovery is relatively limited, the trade side of the loss is severe, the willingness to prepare for the stock is not high, the price of the overall oscillation is weak.

Outlook for the second half of 2023

Outlook of supply and demand pattern in 2023

1.1 Supply trend forecast

In the second half of the year, stainless steel crude steel production capacity is expected to be further enhanced, internal competition may intensify, and production capacity may be further overcapacity.

The second half of the overall supply will be flexibly adjusted with the demand, the raw material nickel element general surplus state, and the nickel industry to Indonesia to focus on resources and cost advantages, ferronickel prices further decline.

Steel mill’s end of profit is still available, and the probability of production cuts is insignificant; steel mills will maintain the second quarter output production, and production is expected to increase further throughout the year.

1.2 Demand forecast

Stainless steel downstream end consumption is widely distributed in various fields, mainly for real estate, construction machinery, and civil manufacturing.

Real estate accounts for a relatively large proportion of the 2023 real estate, and related industries remain weak; stainless steel demand fell significantly year-on-year.

Engineering machinery and manufacturing industry, the second half of the domestic and foreign festivals and other impacts, September-October for the traditional peak season. On the one hand, the demand for stainless steel in the home appliance industry may increase.

Overall, real estate is weak; the manufacturing sector is expected to recover and show an overall weak recovery!

1.3 Import and export trend forecast

Since this year, India due to increased demand, the Russian side suffered sanctions after the import restrictions, domestic exports to Indonesia, Russia’s volume have increased to varying degrees, the future exports to India, Russia’s volume will be maintained, the pressure of domestic overcapacity has been alleviated to a certain extent.

Europe and the United States, because of the high-interest rate environment, the international geopolitical environment, uncertainty, high inflation and high debt, and other issues under the accumulation of Europe and the United States and other major economies, tend the recession, the export market may face more significant pressure.

Outlook for the second half of the market

In the third quarter, domestic consumption or slow recovery, overseas demand is weak, but the recent stainless steel finished domestic social inventory is low; the raw material ferronickel will also bottom out, based on the experience in the second half of the year, the possibility of downstream and traders to prepare for the increase in turnover recovery driven by prices may stabilize and rebound.

In the fourth quarter, domestic and foreign demand tends to weaken. The ferronickel surplus situation will be reflected a certain extent due to the influx of low-cost resources in Indonesia, which will also drive the industry to reduce comprehensive costs, and, ultimately, stainless steel finished product prices will show a downward trend.