Annual Summary: 2020, A Year of  Cinderella for 430 || Stainless Steel Market Summary in China

Preface: 2020 is a really turbulent year to 400 series. People in the stainless steel industry had gone through various emotions with the changes of the 430 market. But fortunately, we had a surprisingly good end. In a word, 430 went through consecutive 7 months of price increases, continuously stockout, and ran backlogs on orders.  

Anyways, let’s check out the performance of  430 in 2020 in detail. 

Chapter One Review of the stainless steel 430 market trend in 2020

1.The price trend of Tisco’s 430/2B in the Wuxi and Foshan market

Looking back to 2019, 430 was mostly in a declining trend, but
in 2020, 430 turned the bad situation around.
Actually, 430 did not instantly begin its bullish era before May when it was still declining to its lowest point in the year. In 2020, the lowest price was US$1,085/MT (cold-rolling 430) quoted in the Wuxi market. The reason behind this is the pandemic which made 2020 the worst year ever. People were guessing could the 430 keep decreasing to the historically low price.

Later in May, the increasing cost of raw materials and the decreasing 430 supply in the market gave the unstoppable force for 430 to increase in price. In April, the mainstream steel mills such as Tisco and Jisco reduced the production, and when it turned to May and June, steel mills were undergoing an overhaul.  These factors directly caused the short supply in the market. Therefore, the price couldn’t help rising.   

Did the supply recover after the overhauls? Surprisingly it did not. Following was the ceased production of the mid-frequency furnace in Yangjinag.
It increased the largest demand of 400 series in the year and the price did not fall during the year. 

Chapter Two The analysis of inventory, production, imports and exports
1.The statistics and analysis of 400 series inventory in the Wuxi market

Generally, the 400 series increased in price because of its stockout. As for the situation of supply, it can be checked through the inventory.

From a broad view, the inventory volume of 400 series and total market inventory were all at the highest level at beginning of 2020. But it kept reducing afterward in both Wuxi and Foshan markets.
No matter it was 430 or 409L, cold-rolling or hot-rolling, as long as it was a 400 series product, it was related to stockout. And it was how the bullish trend began in the 400 series.      

2.The statistics and analysis of 400 series production 

In the recent two years, the increasing production has been a keyword to the output of 400 series. 

In 2019, Tsingshan, Tisco, and Jisco started to increase the production of 400 series, which concerned us a lot. However, seeing the performance of 2020, 400 series was in a feeble status in early 2020, which can be guessed that the productivity was not as high as we thought. During May and June, under the stimulation of the increasing price of ferrochrome and the overhauls of steel mills, in the later six months, 400 series kept rising. Suddenly, the 400 series became the hottest item in town. To reduce producing 300 series for more than 400 series production was once the popular words in the industry. Although in the second half of 2020,
400 series remained in increasing production, but the supply was still in deficit.     

3.The statistics and analysis of the imports and exports in China

The pandemic and trade border affected the global trading of the Chinese stainless steel industry in 2020——
export volume decreased, anti-dumping arose.

Compared to the exports, imports were steady except for the imported cold-rolling stainless steel from Indonesia.

(Remarks: Stainless steel products conclude stainless steel sinks and washbasins, stainless steel dining tables, and other stainless steel kitchenware, stainless steel machine belts, and woven fabrics made by stainless steel.)

From the perspective of the custom data,
since March 2020, the exports of China’s stainless steel products had been rising. In November, it was about 99 thousand tons, which increased by 16 thousand tons compared to October and the increasing percentage is 19.9%; it also increased by 28 thousand tons compared to the same period of 2019, and the percentage is 39.4%. From January to November, the total volume reaches 766.8 thousand tons, 51.6 thousand tons higher than the same period of 2019, and the rising percentage is 7.2%.

Chapter Three The price trend of the raw material, ferrochrome 

1.The bidding prices of high carbon ferrochrome by steel mills in 2020

In 2020, the bidding purchase prices of the four largest stainless steel mills in China were almost in a synchronized trend. The purchasing prices kept the same pace as the high chrome market prices. The highest price fell in June. That was US$972/50 reference tons – US$1,003/50 reference tons; while the lowest price was in March and April, about US$854/50 reference tons - US$886/50 reference tons.

From the price trend graph above,
in June, when the raw material met the highest price, it was also the time when the 400 series began its bullish trend.

Chapter Four Top 10 issues in the industry

1. Taigang's first batch of 2.3mm ballpoint pen nib steel has been down to the production line

2. Rippu Technology will produce the first batch of 400 series stainless steel wire rods after the holiday

3. The project of "Wide and Ultra-thin Precision Stainless Steel Strip Process Technology and Series Product Development" by Tisco won the second prize of the International Quality Innovation Competition

4. Jisco Hongxing: Antibacterial stainless steel is in the research and development stage and is expected to be launched on the market in the second quarter

5. Taigang made a breakthrough in the stainless steel rolling track

6. Taishan Steel will produce high-end ultra-pure ferritic stainless steel

7. Tisco succeeded in producing high-end welding materials

8. J430 antibacterial stainless steel of Jisco listed on the market

9. Jisco developed steel for winding steel wire for bridge cable

10. Building 25 full-hydrogen bell-type annealing furnaces, JISCO plans to increase the annealing capacity of stainless black coils by 260,000 tons

Chapter Five Summary

2020 is a special as well as a tough year for us. The pandemic shut down all industries. But we still contribute to our power to support people.
We will have a brighter future in 2021! 

----------------------------------------------------------------------Stainless Steel Market Summary in China----------------------------------------------------------------------

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