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2016 stainless steel market competition will be "intense"
Source: Yangtze River Nonferrous Metals
By 2015, the stainless steel market prices showed unilateral downtrend, a 10-year low, the cost of steel and stainless steel market prices continuous price "upside down." 2015, further deterioration of the stainless steel industry supply and demand, high inventories stainless steel plant, individual private steel mills shut down due to continuous losses occur phenomenon. 2016 stainless steel prices will show a "roller coaster" trend, rose and fell in the first half (soaring plunge), weak correction channel into the second half.
2015 stainless steel production growth reduced prices
By 2015, the global economy weakening, the dollar, commodity prices continue downward trend in 2014. Global commodity prices fell across the board, stainless steel and related products could not escape. As of the end of November 2015, Chinese steel prices fell in early 2015 compared with a 28.1%, LME (London Metal Exchange) price of nickel fell by 46.1%, laterite nickel ore prices fell 51.1%, ferronickel prices fell 37.6%, high carbon FeCr prices fell 7.8%.
By 2015, global crude steel production year on year increase is reduced, and the global stainless steel crude steel production growth China has also been reduced. 2015 global stainless steel crude steel production of 42.2 million tons, an increase of 1.2%, while the average growth in the previous four years, about 8%. 2015 Chinese stainless steel crude steel production of about 22.18 million tons, an increase of 0.41%, while the previous 5-year average growth rate of over 15%. By 2015, China's stainless steel crude steel production in the proportion of global production declined by 53 per cent in 2014, 52.5% of 2015, but still accounted for more than half of the world.
2016 stainless steel market to remain weak
By 2016, China's stainless steel market is expected to remain weak, mainly as follows:
First, stainless crude steel production or negative growth. 2016 global stainless steel crude steel production of 42.5 million tons, an increase of 0.7%, output growth mainly from the economic development and stability in Europe and America. 2016 Chinese stainless steel crude steel production was 22 million tons, up or negative growth, margin of -0.81%. 2016 Chinese stainless steel crude steel production accounts for the proportion of global production dropped further to 51.8%.
Second, the stainless steel plant capacity utilization, or will fall. Chinese stainless steel production capacity increase year by year, has dropped to single digits in 2015, 2016 will continue to decline 3% to 36 million tons. Chinese stainless steel plant with capacity utilization of downstream demand and market changes. By 2015, China's stainless steel plant capacity utilization at around 63% in 2016 is expected to fall to 61%.
Third, the apparent consumption of stainless steel will also negative growth. Stainless steel apparent consumption and economic growth, is closely related to demand. By 2015, China's apparent consumption of stainless steel is about 17.32 million tons, an increase of 7.85%, while the 2014 Apparent consumption increased by 8.4%. 2016 stainless steel apparent consumption will be negative growth, reduce about 1.5 percent to 17.05 million tons.
Fourth, export trade friction pressure diminished, stainless steel exports recovered to 2014 levels is difficult. 2014 Chinese exports of stainless steel increased by 45% to 3.85 million tons; expected negative growth in 2015, a decrease of 11% to 3.4 million tons; 2016 was 350 million tons, an increase of 2.9%. 2016, with the decline in steel consumption in China, the cost of the stainless steel plant will strive to play the advantages, and actively increase exports. Chinese exports of stainless steel products Series 300 varieties of more than 80%, while the state's 13 percent tax, but because of trade friction, steel exports were unlikely to return to 2014 levels.
Fifth, stainless steel plant to stock a long way. Downstream demand slowdown, exports fell, insufficient efforts to cut stainless steel plant, resulting in inventory digestion cycle extension. 2016, if demand does not increase significantly, while the supply side remained stable, steel mills, the stock market will face the risk of rising volume.
Sixth, steel sales policy changes. Because the stainless steel industry downturn and fierce competition between mills. From 2014 to 2015 August, steel mills and traders to take after clearing sales model, steel mills virtually lost the initiative, at the end of the market "price drop" phenomenon obviously, the price all the way down. From the beginning of the second half of 2015 (individual mills from September 2015 start), Japanese steel prices take a unified settlement pattern, to a certain extent, ease the pressure on steel passive, while nickel prices stabilize get, steel production other good news with stainless spot market prices stabilize rebound. 2016, if the intensity of steel production is limited stock increased risk outlook stainless steel will increase dramatically.
On the whole, the domestic stainless steel plant in 2016 will continue to enhance the professional steel production technology level, expand the proportion of special steel production. Domestic stainless steel industry competition will be more intense, between 2016 and 304 private steel mills and other general competitive stainless steel, special steel fierce competition between large steel mills. By 2015, mergers and acquisitions among steel mills have been kicked off the 2016 carbon steel plant involved in the stainless steel industry will intensify competition