Since this year, affected by the global epidemic, stainless steel futures prices have continued to decline. Although the price has rebounded from the beginning of April to the present, the fundamentals remain at a weak level. On April 10, experts from the Stainless Steel Branch of the China Special Steel Association made an analysis and outlook on the stainless steel industry at the stainless steel industrial chain special event of the online metal week series of activities of the "Industrial Training Base" of the last issue.

"China's stainless steel smelting capacity is currently continuing to grow." Liu Yanping, secretary general of the Stainless Steel Branch of the China Special Steel Association, introduced at the meeting that China's stainless steel crude steel production capacity in 2019 is about 38 million tons, and the capacity utilization rate reaches 77.4%. So far this year, there are about 20 million tons of stainless steel cold-rolling capacity, and it is expected that about 3 million tons of new cold-rolling capacity will be added in the future. In addition, the production capacity of stainless steel long products is also concentrated on the market. The domestic stainless steel billet continuous casting, rod and wire projects increase, and the future of long product competition will also be very fierce.

In terms of output, Liu Yanping said that China's stainless steel output in 2019 reached 29.4 million tons, a year-on-year increase of 10.08%. The global stainless steel output was 52.22 million tons, a year-on-year increase of 2.9%. Among them, the proportion of Chinese stainless steel in the world rose from 52.6% to 56.3%. "Due to China's huge consumer market and consumption upgrade trend, the future situation in which China's stainless steel production capacity accounts for more than 50% of the world's total will be maintained for a long time, and the growth of global stainless steel production will definitely be led by China." She said.

Although China has a large proportion of stainless steel production, there is still a lack of per capita consumption. Data show that China's per capita apparent stainless steel consumption in 2019 is 17.18 kg, a year-on-year increase of 1.39 kg or 8.8%. Apparent consumption increased by 9.19% year-on-year to 24.05 million tons, higher than ISSF's previous expectations. Liu Yanping said that compared with Italy and South Korea, where the product industry is developed, more than 30 kg per capita, and Japan, Germany, more than 20 kg per capita, China's stainless steel per capita consumption still has room for growth.

According to a reporter from the Futures Daily, China exported 3.67 million tons of stainless steel in 2019, a year-on-year decrease of 8.06%; imported stainless steel of 1.12 million tons, a year-on-year decrease of 39.62%. From January to February this year, imports of stainless steel were 149,100 tons, a year-on-year decrease of 38.54%; export stainless steel volume was 422,200 tons, a year-on-year decrease of 11.95%. Liu Yanping said that China's stainless steel industry has always focused on domestic consumption, while taking into account the needs of the international market. Affected by the spread of the global epidemic, the export volume is not optimistic, and the exemption of billet import tariffs has triggered market speculation about the increase in import volume this year.

Liu Yanping introduced that in the context of the global epidemic, China's stainless steel output fell in the first quarter year-on-year, and some companies responded to the lack of downstream demand by suspending or reducing production. She believes that the sudden epidemic situation has prolonged the suspension period of some steel mills during the Spring Festival overhaul, and the strict traffic control and personnel isolation policies in the previous period have affected the transportation of raw materials and steel. At present, some steel mills are facing a shortage of raw materials and are forced to reduce production, while downstream users and the resumption of market delays have caused steel mill inventories and market inventories to rise sharply.

According to the reporter, China's stainless steel industry started in 1952 and has a history of nearly 70 years. Although it started earlier, it was not until the 1990s that the Chinese stainless steel industry developed rapidly. Therefore, compared with foreign markets, China's stainless steel industry has many deficiencies and challenges.

Liu Yanping said that the current structure of China's stainless steel products is still unreasonable. The proportion of 200 series stainless steel is much higher than other countries and regions in the world, and the 200 series market is more confusing and needs to be standardized and rectified. The proportion of the representative steel grades for industrial materials containing molybdenum stainless steel 316 is low. In addition, the current consumption of stainless steel per ton of steel and molybdenum in China is 1.1 kg, which is lower than the consumption of 2.9 kg per ton of steel and molybdenum in other major stainless steel production areas.

In addition, China's stainless steel industry is also facing some challenges. Liu Yanping said that the current external dependence of raw materials is relatively high, of which the external dependence of nickel exceeds 85%, and almost all chrome ore depends on imports. Since the ban on mining in Indonesia, nickel ore imports have mainly come from the Philippines and chrome ore has mainly come from South Africa, with a high concentration of sources. She admitted that although China is a major importer of nickel and chrome ore resources, it has little say in pricing, and raw material prices face high volatility risks. After the news of Indonesia ’s mine ban in 2019, nickel prices fluctuated significantly, which brought domestic stainless steel companies operations. Great risk.

As a rising star, China's stainless steel industry equipment and process technology are world leaders. Liu Yanping introduced that China's major stainless steel production enterprises have been built in the past ten years, and the equipment technology is large, modern and intelligent, leading the world. At present, three main technological processes are formed: one is to use blast furnace molten iron through KR hot metal pretreatment or converter de-P to refine AOD furnace to produce chromium stainless steel; the second is to use RK-EF process to produce nickel-containing molten iron and AOD furnace to produce nickel-chromium stainless steel The third is to use an electric furnace to melt scrap steel and produce stainless steel by AOD furnace refining. Among them, hot rolling is mostly a wide hot strip rolling process, and the level of domestic equipment is relatively high.

Although China's stainless steel production accounts for a relatively low proportion of steel compared to Europe, Liu Yanping believes that stainless steel has features such as functionality, substitution, and environmental protection, and has strong vitality. With the transformation and upgrading of China's stainless steel industrial structure, high-end stainless steel applications will continue to expand, with broad application prospects. At present, the concentration of China's stainless steel industry is relatively high, and the production capacity of the top ten companies in the stainless steel industry accounts for 81.08%. As the concentration of new steelmaking capacity is released in the future, the concentration of China's stainless steel industry will be further improved.

Since the listing of stainless steel futures in September 2019, the stainless steel pricing mechanism has undergone important changes. Liu Yanping said that the stainless steel futures launched in the last issue will help to form a transparent, open and fair pricing mechanism, give play to the decisive role of the market in the allocation of resources, and enhance China's pricing power in the international stainless steel market. In addition, enterprises can use futures tools to escort their production and operation, which is conducive to domestic and foreign stainless steel production, consumption and circulation companies to use futures tools to manage price risk. The smooth delivery of SS2002, the first contract in February, also prompted the industry to pay more attention to stainless steel futures.