In 2020, until the end of the year, 201 gave a surprise to the industry. Hot-rolling products were not outstanding during the early 9 months of 2020, but things changed 180 degrees after the National holiday in October. The trend of hot rolling 201 went all the way up even in December. As for cold-rolling products, 201 remained in a tepid situation most of the time in 2020. Not until November, did cold-rolling 201 increase greatly.
1. Supply and inventory changes of 200 series in 2020
1.1 The analysis of the crude steel of stainless steel flat product in China
According to our statistics, in 2020, the total production of crude steel is about 24 million tons, which increased by 5.26% compared to 2019. And 200 series remained a similar percentage of the crude steel production like 2019.
In February, affected by the epidemic, the production was in its lowest quantity. After February, the production started increasing.
From April to September, many steel mills were in haul, which influenced the production, so as you can see from the graph above, during these months, the fluctuation of production is small.
Since October, 201 had been out of stock. Meanwhile, the export and import were back on track, and so the transaction heated up, affecting the price to increase as well. Some steel mills recover the productivity of 201. Thereby, the production rose in November.
1.2 The analysis of 201 inventory changes.
In the Wuxi market, 201 stock products accumulated mainly happened in February, August, and September.
Due to the epidemic, the market did not open until March, leading to urgent demand from the downstream buyers. Therefore, in March 2020, when the market finally ran, the inventory of 201 was consumed quickly and in a decreasing trend.
Since early August, the inventory went up, because the arrival of 201 to the market stacked up and the transaction was gloomy, causing 201 to get stuck in its worst situation in the year. After the holiday in October, the downstream buyers started to buy, which released the pressure of the 201 inventory, and the inventory trend was in a downward trend.
After October, the products arriving on the market in small quantity, and 201 had been out of stock, when the transaction began to grow. Again, the inventory dropped.
It is also the time when 201 made a flip. From November to December, because of stockout, the decreasing production of the steel mills, and the turning-good transaction of cold-rolling 201, the inventory was reduced at a high speed.
2. The analysis of 200 series price and cost in 2020
2.1 The analysis of 201 price trend in 2020
During 2020, the prices of hot-rolling and cold-rolling 201 showed a similar tendency. From the first quarter to the third quarter, the prices remained stable.
The 201 products produced by China are mainly sold to the abroad market. Due to the pandemic spread around the world, which shut down most of the imports and exports business, and so did 201. And 201 could only leave to the domestic market. However, the 201 supply largely exceeds its demand in China, so the price of 201 had failed to increase in the first three quarters of 2020.
When it came to the fourth quarter because Tsingshan reduced the 201 productions, some steel mills were in haul, which shortened the supply, and the international business recovered gradually, for that moment, 201 was short in supply. Thus, the price increased.
There was once the prices of the hot-rolling product and the cold-rolling product going upside down. Since October the 5-feet hot-rolling stainless steel had been out of stock and it couldn’t meet up the downstream demand, the market was in severely short supply. The hot-rolling product become the hottest item and kept boosting the price. In December, the market stayed the frantic tendency towards the 201 when the 201 stock products were reducing. Steel mills boosted the price on purpose. The price of the cold-rolling product kept rising.
For half of the year, 201 remained. The increase of 304 did not affect it, but it followed the decreasing trend of 304, which killed the traders’ motivation to sell 201. The good news came in July when the price of 201 began to increase. Until November and December, the price was still increasing, which was not common in previous years. This time, 304 failed to affect 201 to decrease at the same time.
2.2 Cost analysis of electrolytic manganese
As we all know, the content of manganese in 201 stainless steel is more than 10%-10.5%, so the price of electrolytic manganese also affects the production cost of 201 and affects the price of 201as well.
From the graph above, the price fluctuations of electrolytic manganese were quite large. Form July to August, it was in a low price period, but the price started to rise after October, especially in December, which reached the highest price of 2020. From the perspective of the cost curve, the cost increased significantly in December.
3. Forecast about stainless steel 201 in 2021
It should be a good end to 201 in 2020. In November and December, both transactions or prices set a foundation for the future market in 2021. As we know, in 2021, many steel mills will reduce the production of 201, so the stockout of both hot and cold rolling 201 will appear in the future months.
The price of hot and cold rolling is affected by various factors. Based on the rising trend of prices of electrolytic manganese and ferrochrome recently, raw materials are able to support the price. If there is a shortage of stock, even if the transaction is not as good as we expected, the price of 201 won’t fall sharply in the short term.
In this tough year, the stainless steel industry still gave a good result to us. Not to mention we already have a good beginning in 2021, we believe the stainless steel market will go robust.
Affected by the epidemic in 2020, many companies are facing bankruptcy and many industries are struggling. The stainless steel industry has overcome obstacles this year and contributed to the economic development of the entire society. Nothing can stop us from being better in the future after this rough 2020. We believe everything will go well and smoothly!
--------------------------------------------------------------------------------Stainless Steel Market Summary in China--------------------------------------------------------------------------------