Steel mill production limit news fermentation stainless steel soared 4% anger brush record high

Release time:

2021-07-26

Steel mill production limit news fermentation stainless steel soared 4% anger brush record high

Shandong issued a document requiring the reduction of crude steel: the annual output does not exceed 76.5 million tons

Market sources revealed that Shandong Province has recently made it clear that the output of crude steel this year will not exceed 76.5 million tons, requiring that the output of steel enterprises in 2020 be based on the output of steel enterprises. Among them, the output of crude steel that has not been unified shall be based on the investigated output, and the output of poor energy that can be transferred shall be based on the converted production capacity. Factors such as environmental protection, energy consumption, capacity utilization rate and layout planning shall be comprehensively considered to determine the output control targets.

Affected by the crude steel production limit news, most varieties of black line ushered in the rise! Among them, stainless steel main contract rose more than 4%; coke, thread, hot coil, etc. rose more than 1.5; and iron ore fell, down more than 1.5.

It is worth noting that the recent performance of stainless steel has been particularly strong. Since April 23, the main contract has increased by more than 40%, and the highest price has been refreshed to 19400 yuan/ton, a record high!

CITIC Construction Investment (601066) futures analysis pointed out that the stainless steel even record high mainly from three reasons:

Tightening supply of 1. raw materials brings support to the cost side. On the raw material side, the worsening of the epidemic in Indonesia, the slowdown in nickel-iron imports, superimposed on domestic domestic power rationing and other measures resulting in tight supply of nickel-iron and chromium-iron, prices are generally on the rise, bringing cost support to stainless steel.

Second, stainless steel production reduction is expected to bring supply contraction concerns. The news of the steel mill's production limit continues to ferment. In addition, it is reported that this year's stainless steel production requirements do not exceed last year, if strictly implemented, in the first half of the year, stainless steel production increased year-on-year, the second half of the stainless steel production will be compressed.

Strong 3. demand has led to a sustained decline in inventories. Downstream demand continues to improve, stainless steel supply has been tight for more than two months, Wuxi and Foshan inventory also showed a continuous downward trend. Although it has now entered the traditional off-season, the demand side has not cooled significantly.

In terms of inventory, Mysteel data show that as of July 16, Wuxi stainless steel inventory was 387700 tons, an increase of 25800 tons over last week, while Foshan stainless steel inventory was 148600 tons, a decrease of 1000 tons over last week.

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In general, steel mills limit production continued fermentation, superimposed supply and demand mismatch of the fundamentals of good stimulation, stainless steel is expected to continue to shock strong operation.

stainless steel after the market?

Regarding the future market, Ruida Futures (002961) pointed out that the upstream Inner Mongolia implemented power rationing in July, ferrochrome production is expected to be greatly affected, and ferrochrome prices continue to rise. Domestic consumption of ferronickel is strong, and Indonesia's ferronickel return volume is limited, supporting ferronickel prices, tightening the supply of stainless steel raw materials, and rising production costs. Although the current high profit makes the steel mills to increase production willingness is obvious, but the recent northern many steel mills to limit production news continues to ferment, the later continue to pay attention to the actual implementation. The recent steel price correction, the market early bullish sentiment began to hesitate, the receiving situation has cooled, stainless steel prices are expected to adjust at a high level.

ITC futures believe that the outbreak of overseas epidemics again, the market risk aversion repeated, the state to provide stable prices, stainless steel futures high volatility. At present, the supply of stainless steel raw materials nickel iron, ferrochrome is tight, the spot part of the specifications are still out of stock phenomenon, superimposed on the impact of limited production news and heavy rain, steel prices are easy to rise and difficult to fall, but the downstream fear of high sentiment gradually, follow-up attention to macro news and limited production news progress.

Huatai futures analysis mentioned that 304 stainless steel is currently in a state of supply and demand, the industrial chain performance of high supply, high demand, low inventory, low inventory state to enhance the elasticity of price increases. Recently, the social inventory of 300 series stainless steel has gradually increased, and the current profit of 304 stainless steel is higher than that of other series. The output of 300 series may further rise in July. However, the current spot market supply is still not abundant, stainless steel factory production restrictions are still expected, the second half of the supply may be reduced to a certain extent, short-term 304 stainless steel prices are still supported.

(Source: Flush Futures Pass)