The cost side pressure of stainless steel welded pipe enterprises is still high

The “March gold and April silver” is coming. Whether the scrap steel market can continue to rise is a matter of concern to the current market. At present, the black plate continues to improve in the near future. The expected demand recovery of the stainless steel welded pipe market will drive the plate and spot market. However, at the critical moment when the market validation period is about to enter in March, we still need to have expectations for the future, and the scrap steel price is still supported.

February 2022 is coming to an end. As the month of centralized resumption of production of electric arc furnace enterprises after the year, the demand for scrap steel in the market has increased significantly, the operating rate of electric arc furnace enterprises has also increased, and the overhaul of long-process enterprises has also decreased. The market as a whole is developing well. The trend of scrap steel price also conforms to the prediction of the market before the festival. The profits of traders who have prepared goods before the year are also relatively objective.

In terms of price, the trend of scrap steel price in the first year of 2023 is roughly the same as that in 2021 and 2022. Although the price in 2023 is significantly lower than the center of gravity in the first year of 2022, it is also because the scrap steel market experienced a period of decline in the second half of 2022, making the center of gravity of scrap steel move down as a whole, but the current overall trend is also in line with the expected price rise trend before the year.

In terms of demand, in February, with the continuous opening of electric arc furnace enterprises and the normal production of long-process steel enterprises, and even some long-process enterprises taking the initiative to increase consumption and production, the operating rate of short-process enterprises has also increased. For example, the overall operating rate of an electric furnace enterprise in southwest China last year was maintained at 30% – 40%, but with the recent improvement of the threaded surface, the spot price of stainless steel welded pipes has increased, and the overall demand of the downstream market is expected to be good in the future, The market has accelerated, and the operating rate of stainless steel welded pipe enterprises has increased.

As for the profits of steel mills, with the rising price of stainless steel welded pipes, the profits of long-process steel enterprises have improved slightly, but the profits of short-process steel enterprises have narrowed due to the obvious support of scrap steel prices and the large increase. On the whole, the profits of the steel enterprises in the long and short process are still poor. Although the stainless steel welded pipe has risen, there is no obvious improvement in the profits. The pressure on the cost side of the stainless steel welded pipe enterprises is still high. The raw materials, especially the scrap steel, are subject to this. Once the price of the stainless steel welded pipe falls, the scrap steel will bear the brunt.

In the stainless steel welded pipe market in March, for the present, everyone’s expectation is the improvement of the future terminal demand. With the continuous release of favorable policies for domestic real estate, including the relief of funds for real estate enterprises, the pressure on real estate has improved compared with last year, but in terms of demand, the substantive recovery of real estate may take some time in the future; At present, to expand domestic demand, infrastructure is the main force driving the demand for building materials and raw materials, which is prior to the recovery of other manufacturing industries. From the perspective of current actual demand, most of the demand is also driven by infrastructure projects. From the reaction of the current stainless steel welded pipe market, we also have a positive view on the future demand, so the recent market trend is strong. But March is also the critical time for the market to verify the expectation. If the demand meets the expectation, the black side will continue to improve; If the market verification deviates from the expectation, the black side will also be hit.

Overall, the overall environment of stainless steel welded pipe this year is good because of last year’s situation. For the scrap industry, the tight supply of scrap steel will not be easily changed, while the real estate, infrastructure and manufacturing industries will also be better than last year, driving the market demand, thus driving the price of stainless steel welded pipe, thus driving the scrap steel. Therefore, we still need to hope for the future, and the price of scrap steel is still supported.