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Stainless steel profits repair market is improving

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Stainless steel profits repair market is improving

May 22, 2019

This year’s stainless steel market may be said to be “busy season not flourishing, off season is not so light”. Before and after the May Day due to steel prices, upstream and downstream game, the price of stainless steel briefly stabilized, and began to overcast state… Recent profit repair, mainly because the decline of stainless steel raw material end is greater than the decline of stainless steel price, whether the future profits will continue to repair, steel production when cash, SMM combined with the actual research and industry data analysis of stainless steel consumption form.

Stainless steel enterprise profit:
Wuxi market this week 3 series stainless steel cold rolled dark down price 50 yuan/ton to 100 yuan/ton, steel mill’s price, but the price of 3 series for Yin, one is the raw material price significantly, 2 it is part of the agent to cut the price to pay, but the actual clinch a deal is still lighter, part of the agency is still bearish market outlook, just need to purchase, although the recent steel price, raw material drops stainless steel factory loss narrowed somewhat, but if subsequent raw material prices continue to drop, will inevitably drag on stainless steel prices, is quite difficult to sustain. It is expected that next week 3 is still weak market operation, focus on the new round of qingshan stainless steel opening price.

Demand side:
In the downstream consumption field of stainless steel, the proportion of building materials decoration and mechanical equipment is about 45%, that of home appliances is about 8%, that of rail transit is 8%, and that of catering equipment is about 15%.
According to the national bureau of statistics released a series of Numbers, domestic complete amount of investment in fixed assets growth (monthly), march pipeline and the railway transportation industry growth is slowing back slightly, in the first quarter of 2019 in 10-20% growth, stable construction growth fell by 8% – 10%, construction of demand, although construction slowdown, but there is still demand for stainless steel support. From January to march, 2019, some downstream consumption areas are tepid, among which the growth rate of automobile output is still negative, and the growth rate of ship output rises to 14.3% in March, 2019 after experiencing the negative growth rate in the whole year of 2018, which also confirms the good performance of hot rolling downstream consumption reflected by stainless steel plants in March, 2019, and some steel mills increase the output of 3 series hot rolling. Household appliances and tableware consumption will gradually improve from January to April 2019.

Stainless steel social stock:
From the data over the years, stainless steel social inventory seasonal accumulation and decline, but this year because of the stainless steel output growth rate is higher than the downstream demand growth, there is no obvious downstream consumption season points, may consumption is still weak to verify. At the end of April 2019, the social inventory of 3-series stainless steel increased by 0.69% to 316,300 tons (including 49% cold rolling and 51% hot rolling).

According to SMM research, south China steel mills have not yet received may hot rolling futures orders, east China steel mills react to the current deal in general, recently due to the decline in raw materials profit repair, but still bearish afternoon. Downstream agents said that the current supply is still too much, just need to take goods, because the downstream demand is scattered, the actual downstream demand change is not much.
Price trend: social inventory is still in a small range of fluctuations, there is no obvious trend of stock decline, in addition to the recent decline in the price of raw materials is greater than the decline in the price of stainless steel, steel mills profit repair or loss narrowed, if the future of the raw materials continue to fall, it is expected that the steel mills and agents price is difficult to maintain, may prices are still falling risk.

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