1. Global stainless steel purchasing activity is steady, at a level, generally, a little below that of one year ago.
2. A pickup in order volumes was reported in January. This was boosted by stock replenishment.
3. Many supply chain participants routinely minimise their inventory levels towards the calendar year-end, in order to improve their quarterly or annual accounts. Material must then be purchased at an accelerated rate at the beginning of the new period, to return stocks to a practical, working level.
4. Subsequently, with underlying demand, reportedly, rather weak, buying activity slowed, during late January and February. As a result, producers, in most of the world, were unable to achieve price rises, or even, in the case of flat products, maintain rollover values, this March.
US PRODUCERS PROPSOE BASIS PRICE INCREASES
1. The exception was in North America, where the integrity of the “basis plus alloy surcharge” pricing system persists.
2. Accordingly, a moderate increase in the mills’ published alloy extras, for February, led to a corresponding uplift in transaction values.
3. US producers are beginning to propose basis price increases – or reduced discounts – for future orders. Buyers may not concede that demand is strong enough to support such an initiative.
SUPPLY CHAINS DISRUPTED BY COVID-19
1.Many manufacturers, in Europe, and other developed economies, are reliant on Chinese steel or components. Their supply chains have been disrupted by production outages, in China, and transport restrictions.
2. Conversely, the lengthy, precautionary shutdowns of many Chinese businesses, after the Lunar New Year, reduced domestic demand, in that country. This may lead to excess supply of stainless steel, in the near term.
2019 PRODUCTION
1. Annual global crude stainless steel production for 2019 is estimated to have totalled an all-time high figure of 52.9 million tonnes. This represents a year-on-year increase of 4.3 percent.
2. Chinese output growth, last year, continued at a much higher rate than was previously predicted. The latest estimates indicate that the annual total was around 30 million tonnes – over 12 percent more than the 2018 figure.
3. This equates to almost 57 percent of global crude stainless steel output. We expect more moderate expansion, at around 4 percent, in 2020.
4. Indian stainless steel production continues to develop at a steady rate. An increase of more than 3 percent, year-on-year, to nearly 3.9 million tonnes, is estimated for the 2019 total. A rise of a similar dimension is expected, for this year’s outturn.
5. Output in the European Union dropped by around 7 percent, last year, compared with the 2018 figure. In the United States, a decline of more than 5 percent was recorded. In both cases, an uptick of around 2 percent is predicted, for this year’s result.
6. The situation in the Far East is similar. The outturn tonnages for 2019 are estimated to represent annual reductions of around 9 percent in Japan, 5 percent in South Korea, and 15 percent in Taiwan. Increases, of less than 2.5 percent, year-on-year, are forecast, for all three countries, in 2020.
7. The expansion in output from countries in the “others” category stalled, somewhat, in 2019, as international trade barriers limited export opportunities – notably, from Indonesia. Nevertheless, new production facilities are likely to bring about significant output growth, in the coming year.
Source:
https://worldsteelprices.com/2020/01/31/china-drives-stainless-steel-production-surge/
https://worldsteelprices.com/2020/03/02/stainless-steel-markets-wane-following-january-restocking/
