Stainless steel prices in Asia have plateaued for now.
But most suggest this is a temporary slowdown in advance of the Chinese New Year holidays.
Thereafter, the market is likely to continue its relentless rise of the last two years.
China stainless steel market ramps up output
According to ArgusMedia, China’s production, imports and consumption of stainless steel all rose in 2020. China produced 30.14 million tons of crude stainless steel in 2020, up by 2.51% from 2019.
Despite significantly higher nickel prices, output increases favored nickel bearing 300 & 400 series and even duplex stainless steel with only non-nickel-containing 200 series declining.
Meanwhile, imports surged to 1.81 million tons, up 61.33%. Much of those imports came from Indonesia, where Chinese firm Tsingshan Holding Group has a new mill. As such, imports from Indonesia rose 24.3% year over year to 1.1 million tonnes in the first nine months of 2020.
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Exports, on the other hand, declined. Trade disputes between China and the United States, the European Union, Japan and South Korea led to the imposition of duties on shipments.
As January came to an end, stainless steel future on the Shanghai Futures Exchange continued to rise, Reuters reported. Rising raw material prices and expectations of strong demand after the Chinese New Year holidays next month fueled the gains.
“Recent Chinese nickel pig iron output continued to fall, nickel pig iron prices steadily rose…. stainless steel costs will remain at high levels,” Reuters reported, implying the market is expecting prices to continue to rise after the holidays.
Early tailwinds for China stainless steel
Some softening in commodity prices is likely later in the year. However, analysts suggest the first half of 2021 will continue to benefit from the tailwinds of stimulus measures and rising optimism stemming from the rollout of vaccinations.
By the same token, any significant setback in vaccine rollout or the unexpected spread of mutant virus strains proving immune to existing vaccines would upend that optimism.
However, for now, China at least is expecting prices to continue their strong showing from 2020 into 2021.
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