Stainless Steel Pipe Supplier Wenzhou Kaixin China
Spot Dynamics
[Iron ore] The market is mainly stable and rising, following the high level of futures, and mineral processing is optimistic about the future market. It is expected that there is room for improvement in steel enterprise bidding in the afternoon, but steel enterprises’ profits are under pressure and their attitude towards price reduction is relatively firm. Pay attention to the afternoon price announcement and futures trends.
[Coke] The terminal market is still not improving, and the situation in Litun, a steel factory, is poor. In addition, the inventory level of coke is still acceptable. Some steel factories have controlled the arrival pace, affecting some coke enterprises to slow down their shipments, accumulate inventory slightly, and add to the continuous decline in raw coal prices. Coke cost support gradually disappears, and market sentiment is weak. Some steel factories have the intention to increase or decrease, and it is expected that the coke market will stabilize and weaken in the short term.
[Building Materials] This week, the price of building materials nationwide followed the market fluctuations. On the macro level, concerns about the turmoil in overseas banks eased, and market risk appetite rebounded. In the industry, real estate sales have gradually improved, and expectations have gradually materialized. In the first half of the year, construction is expected to generate momentum. Fundamentally, there are more loss-making manufacturers, and there is insufficient momentum to increase production. The recent increase in rainfall across regions has led to weak purchasing willingness in the downstream, weak supply and demand, and a continuous process of inventory depletion. In the context of high initial purchase costs for traders, traders and steel mills have a strong willingness to set prices. Looking forward to the future, demand in April is still predictable, and the fundamental contradiction of stainless steel pipes is not significant. It is expected that the trend of short-term fluctuations may be strong.
Industry Information
[The steel PMI in March 2023 showed that the operation of the steel industry fluctuated, and companies’ expectations for the future market were tight.] Market demand continued to recover, but the recovery was less than the company’s expectations. The production of steel plants has kept rising, while the price of stainless steel pipes has risen and fallen back, and the overall price has declined during the month. It is worth noting that steel mills have tightened their expectations for the future market, and raw material procurement activities have also tended to be cautious. It is expected that in April, the market demand for stainless steel pipes will continue to rise, and steel mill production will increase slightly. Iron ore prices continue to fall, and stainless steel pipe prices are not strongly motivated to rise.
“Economic Daily: Changes in iron ore prices should not be taken lightly.” Economic Daily article points out that enhancing China’s voice in commodity prices is the fundamental way to address the “irrational” rise in prices. China is the largest buyer of many bulk commodities such as iron ore, and should have the pricing power for related commodities. However, the strong “Chinese demand” has become a bargaining chip for many speculators to hijack China. If this asymmetry cannot be broken, a reasonable price formation mechanism will not work, and the risk of commodity price fluctuations will not be eliminated. In response, it is necessary to strengthen the capacity building of commodity pricing centers, not only to make good use of the international futures market, but also to accelerate the improvement and expansion of the domestic futures market, cultivate more Chinese enterprises with global industrial chain supply chain control capabilities, integrate more “Chinese factors” into the global commodity pricing system, and firmly grasp the initiative.
[Interpretation by the Bureau of Statistics on Manufacturing PMI in March: Manufacturing Industry Remains Expanding] In March, the manufacturing purchasing managers’ index (PMI) was 51.9%, down 0.7 percentage points from the previous month, above the critical point, and the manufacturing industry remains expanding. From the perspective of sub indexes, among the five sub indexes that constitute manufacturing PMI, the production index, new order index, and supplier delivery time index are all above the critical point, while the raw material inventory index and employee index are below the critical point.
Futures Dynamics
Market demand continues to recover, but the recovery is not as strong as expected by the enterprise; The production of steel plants remained rising, while the price of stainless steel pipes rose and fell back, with an overall decline in the month; Steel mills have tightened their expectations for the future market, and raw material procurement and activity have also tended to be cautious. Today, the mainstream of stainless steel pipe spot sales is rising, and terminal replenishment is still cautious. The market is mostly in need of replenishment, and trading is generally fair.
Recently, there has been no significant difference in the fundamentals of iron ore compared to the previous period. The supply is relatively stable, the downstream demand is still in stock, and the port inventory is entering the destocking cycle. The fundamentals are relatively healthy. With the release of risks in the previous two weeks, the impact of short-term regulatory risks has weakened due to a relatively high distance. Iron ore rebounds low as the stainless steel pipe warms up, and its resilience is stronger than that of the stainless steel pipe. In the future, it is expected to continue to follow the fluctuations of finished products and remain in a rebound pattern in the short term.
Yesterday’s production and demand data slightly warmed up, forming some support for the market. Recently, the market has continued to recover from a low level. However, at present, due to shifting positions to exchange for months, there has been a large outflow of funds, and the performance of demand in the peak season is not particularly bright, with limited upward drive. It is recommended to wait and see, mainly due to short-term stainless steel pipe vibration.
Summary of stainless steel pipe market
Since February, the price of stainless steel tubes has experienced two pullbacks, but neither has formed a smooth trend downward. Two conditions are required for the trend downward of stainless steel tube prices:
(1) The core condition is that the demand is falsified, which requires simultaneous weakening from both the same and the same point of view. Year on year measures demand intensity, while month on month measures marginal change. The recent apparent data of stainless steel pipes are higher than last year, but there have been multiple changes in the month to month ratio, resulting in repeated price reversals for stainless steel pipes.
(2) The second condition is a decrease in the utilization rate of steel plant capacity. This source still depends on a sharp decline in demand, triggering losses for steel mills, forcing them to reduce production on a large scale, and further causing a decline due to cost collapse. Obviously, the current capacity utilization rate is still in a seasonal recovery period, and cost support is strong. It is not possible to reduce prices in a cost effective manner. If the price falls to the standard of stainless steel pipe production, it will stop falling.
(3) Overall, the current accumulation of contradictions in the stainless steel pipe market is insufficient, and the risk exposure is insufficient. The price of stainless steel pipe still has a period of volatility.