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Expected demand to burst, stainless steel soars into the sky

12 2021.06

Today’s main stainless steel contract rose by more than 4%. This is the largest one-day increase since the July contract this year. Said the momentum is like a rainbow, soaring into the sky.

       According to Mysteel data, this week, the social inventory of 300 series stainless steel (new caliber) rose by 5,500 tons to 360,300 tons, an increase of 1.55%. Among them, cold rolling was basically flat, and hot rolling rebounded slightly. At present, the profit of stainless steel production has been restored, and the willingness of steel mills to schedule production has increased. In May, the output of the 300 series continued to increase month-on-month, and the recent increase in market supply has been significant. However, it is currently in the peak demand season, coupled with the increase in export orders, the market is still out of stock, and the inventory remains in a state of digestion, which supports steel prices.

       On the whole, although the medium and long-term stainless steel faces the explosive pressure of new production capacity of ferronickel and stainless steel in the second half of the year, the medium and long-term prices are negative. However, in the short term, with the gradual improvement of the epidemic situation in Europe and the United States, the pace of global recovery is gradually accelerating, and the external demand for stainless steel will have more room for growth. The social inventory of 300 series stainless steel is still at a relatively low level, and futures warehouse receipts are also at a relatively low level. Once the downstream reaches a consensus on the expected demand outbreak and terminal purchases rise, stainless steel may further face the risk of tight inventory, which will further promote price increases in the short term. At the same time, from the cost side, SMM data shows that China’s electrolytic nickel output in May was 12,400 tons, a decrease from the previous month.

4.53%, down 9.7% year-on-year, June output is expected to rise slightly to 13,600 tons; China's ferronickel output in May was 35,700 nickel tons, an increase of 5.32% month-on-month and a year-on-year decrease of 19.36%. Production in June is expected to continue to rise slightly to 3.79 10,000 nickel tons; China’s nickel sulfate output in May was 21,500 nickel tons, down 5.82% month-on-month and an increase of 128.57% year-on-year. Among them, the production of nickel sulfate using pure nickel as raw material accounted for 46%, and it is expected to increase slightly to 22,700 nickel tons in June. . At present, the supply and demand of nickel is improving, and the production of high-matte nickel may face high uncertainty. Therefore, the cost of stainless steel is strong in the short term, which is easy to rise and difficult to fall, which will further support the price of stainless steel.

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