The supply and demand contradiction, financial direction, and emotional logic of the 904L stainless steel pipe market have not changed

Today, the overall stability of the 904L stainless steel pipe market is dominant, with some markets rebounding slightly and the average price slightly moving up. The overall transaction was poor, and the demand for replenishment before the holiday fell short, reflecting a cautious attitude towards the post holiday period. At the same time, the 904L stainless steel pipe market is worried that the arrival during the holiday will further accumulate inventory, and the proportion of people who are pessimistic is not small.

Today, the rhythm of the 904L stainless steel pipe market is still “fluctuating+rebounding”, but finished products are weaker than iron ore. The rebound effect of iron ore spot and futures is better, and PB powder in ports such as Jingtang, Tianjin, Rizhao, and Qingdao has slightly rebounded, and steel mills have made certain replenishment actions. However, in the case of low demand for finished products, there are two pressures: demand and supply, only in the case of just needed procurement. In this case, the difficulty of rebounding the price of 904L stainless steel pipes is still not small. At the same time, the fifth round of price reduction for coke has continued to move costs down, which has also increased the operating pressure on the price of 904L stainless steel pipes.

From the recent production reduction situation, the overall production decline is not significant, reflecting that the pressure of building materials and steel mills, including electric furnaces, is higher than that of sheet metal. In terms of electric furnaces, the price of scrap steel has fallen, and the profits of electric furnaces in East and South China have recovered, leading to a slight profit situation. The reduction in production has become more complex. Considering the current fifth round of coke reduction, some steel mills in the main production areas of North and East China still have profits, and the effect of the reduction needs further observation. At least until May, when high-frequency production data shows two consecutive month on month declines, the substantial impact of supply pressure on the market may gradually become apparent. At present, the inventory of 904L stainless steel pipes has shown a month on month growth, and the pressure from social warehouses has shifted to factory warehouses, resulting in an increase in factory warehouse pressure. Overall, there is still some shipping pressure in May.

It should be noted that the prices of surface coking coal and coke have reached the level of March 2021, which is at a two-year low. It is worth considering whether the price drop of carbon elements will lead to a repricing of the black industry chain.

Domestic sales are weak, while export sales are declining. Recently, steel mills have reported a decline in export orders, and concerns about overseas demand have increased. On the one hand, the expectation of a decline in demand caused by overseas financial risks and recession still exists; On the other hand, some international relations face increased risks. The 904L stainless steel pipe market needs to pay attention to the impact of the weakening of stainless steel exports on the market.

Price Forecast for 904L Stainless Steel Pipe

At present, the spot market for 904L stainless steel pipes is still weak, with no obvious signs of improvement. When futures try to rebound and encounter pressure, spot transactions also show a strong morning and weak afternoon. The supply-demand contradiction, financial direction, and emotional logic of the 904L stainless steel pipe market have not changed, but the rhythm of the market is affecting the sensitive nerves of the market. Due to the upcoming May, important domestic economic meetings and interest rate hikes by the Federal Reserve overseas both require timely attention, which is also an important condition for balancing the strength of the 904L stainless steel pipe market. The reduction in production has been effective, but it is not significant, and further investigation is needed to determine the actual quantity. In the short term, the market is impressive, with a slight fluctuation trend before the holiday. The sharp drop in the spot price of 904L stainless steel pipes before the holiday is meaningless.