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Stainless steel market price falling down ‘s Hidden Worries

2015/04/08

Since March, the overall market suffered a stainless steel cold storm, although the details of the coil prices ups and downs, but overall have shown a linear decline. On Wuxi market, 201 and 430 mills mainstream quotations are below 8,000 yuan / ton, 304 mainstream steel base price has fallen below 14,500 yuan / ton. So far, 200,300,400 series are like deep down into an infinite loop. In the current overall market behind cold, but also many hidden dangers lurking.

First, the domestic economic deflation

Data show that in March, HSBC China Manufacturing Purchasing Managers Index (PMI) initial value of 49.2%, the highest since last April lows. In the main sub-indices, the manufacturing output index was 50.8%, since the two-month low; new orders index fell for two consecutive months and below the 50 line ups and downs, reaching 49.3 percent, the highest 11 month low; the employment index fell to 47%, the 17th consecutive month below 50%, the most since February 2009 lows; purchase price index edged up to 44.7 percent, but still in contraction zone. Chinese manufacturing activity fell slightly, the overall decline in new business orders, employment decreased.

Second, the prevalence of anti-dumping, export stainless Difficult

March domestic stainless steel market in Yindie channel, Europe and other markets was relatively stable, the domestic market continued to show a widening of spreads, the current export demand still more urgent mills, but the changes in some countries on imports of Chinese steel policy Perhaps you can feel the difficult days just begun.

Brazil started an assessment of the origin of the product range of anti-dumping cases in China's stainless steel tableware; Turkey Plate 7 countries such as China initiated anti-dumping investigations; Canada will maintain Chinese oil pipe anti-dumping duties and countervailing duties; India, China and 304 series stainless steel make a final anti-dumping hot-rolled flat.

In addition, the EU has to rise and fall on the 25th of this month of anti-dumping big stick, produced in China and Taiwan for cold-rolled stainless steel sheet levy anti-dumping duties for six months. Specifically provisional anti-dumping duty rate for the companies involved performed as follows: TISCO, TISCO, TISCO days pipe 24.3% tax rate, export trade company tax co-operation with TISCO 24.5%; Baosteel Group, Baosteel Stainless, Ningbo Baoxin as well as other Chinese exports 25.2% corporate tax rate. Taiwan's Tang Eng, Ye and cooperation with the corporate tax rate of 10.9%, other Taiwanese corporate tax rate of 12%.

Chinese imports of stainless steel products for the above anti-dumping tax rate adjustments were raised, will inevitably increase the pressure on local Chinese stainless competitiveness, while domestic exports of these products, manufacturers will be more is not better than the days.

Third, the steel pressure rising, the outlook is not conducive to the policy side

The current steel inventory pressure, profits are constantly compressing large surface area into the loss. Especially private steel mills, stage production enthusiasm generally not high, there occurs cut, cut and other operations. Meanwhile, in April 2015, Baosteel stainless steel product prices announced, including 304 cold-rolled, hot-rolled ring down 900,700 yuan / ton, 430 cold-rolled, hot-rolled ring down 200,500 yuan / ton, and other species lines do not have come down, seems to presage their late continue to look empty.

Overall, from a macroeconomic perspective, the US economy is getting better, the dollar rose to suppress the LME nickel prices; self-help recovery in the domestic economy is expected to slow down the growth in demand will be in the state. Although the end of February the country's central bank cut interest rates policy introduced, but the growth in demand for stainless steel limited role, support for LME nickel prices persistence to be tested.