Hygienic grade stainless steel pipes still have oscillations and weak rebound adjustments that require caution during operation

The overall market for sanitary grade stainless steel pipes has rebounded slightly today. Driven by the rebound sentiment, other major steel grades also showed localized gains. However, the overall transaction of sanitary grade stainless steel pipes is still average, with differentiation in different regions. Some markets have improved their shipments, while others have even set new lows for building material prices, making it quite difficult to increase prices.

Since April, the price of sanitary grade stainless steel pipes has fallen again. The prices of second and third tier resources in local markets have already appeared with the prefix “3”, which is indeed returning to the price level before the Spring Festival and winter storage. Some large households have made money by shipping their goods for a long time, but they have already incurred losses on the goods at the back. As the demand for sanitary grade stainless steel pipes weakens in April, the shipping situation is not ideal enough. After the steel mills passively reduced prices, there is still a problem of price inversion. Due to the significant increase in iron ore prices compared to finished products during the rise, and the significant decrease in sanitary grade stainless steel pipes compared to iron ore during the fall, the steel mills have returned to the brink of losses during the repeated rise and fall. At present, the losses of the electric furnace have increased, and the pressure to reduce production has increased. This indicates that life is difficult for both steel mills and steel traders.

Looking back at the downward drive of this round, it is mainly reflected in various factors such as the amplification of phased supply-demand contradictions, weakened support for raw materials, and overseas risk spillovers. The contradiction between supply and demand is the most prominent fundamental performance, manifested in even in April, the production of sanitary grade stainless steel pipes, hot metal production, and crude steel production are still high, some varieties are still increasing production, inventory reduction is slowing down, market trading volume is decreasing, and there is no significant increase in terminal. In the midst of changes in raw materials, there has been a pullback in iron ore policy control prices. The first round of coke reduction has been lifted, and the second round of reduction is rumored to have been put on the agenda. With the monthly coal import volume reaching a new high and coal prices significantly decreasing this year, there is also some room for profit in the upstream of coke. In peripheral markets, the reduction in production by major Middle Eastern crude oil producing countries has driven up oil prices, making it difficult to reduce inflation pressure in the United States, and the expectation of another interest rate hike remains high. However, from the perspective of the decline in domestic sanitary grade stainless steel pipe prices, when the main force switched months, there was still a certain amount of rapid market smashing behavior with funds and emotions, which widened the basis between the main force and the spot market, providing a certain amount of basis arbitrage space.

Is there a positive driver? Macroscopically, there has always been a recovery, but expectations have exceeded reality and ushered in a window of correction. In the short term, there is support for the electricity cost of electric furnaces. If the price drops again, a portion of the electric furnace production will be washed out first. If the crude steel pressure reduction and export regulation are smoothly implemented, they will also reduce the supply pressure. The elastic space of demand for sanitary grade stainless steel pipes may be limited, and short-term supply contraction has a greater impact on prices. If the first quarter economic data is released in the middle of the year and there is still a performance that exceeds expectations, there may still be an opportunity for a rebound. If not, there is still a possibility of continuing downwards.

Price prediction of sanitary grade stainless steel pipes

From the current perspective, the market for sanitary grade stainless steel pipes has rebounded and shipments are average. Today, a few markets are accepting shipments at reduced prices. In the second half of this week, the market is increasingly affected by industrial policies, and it is necessary to continue to pay attention to policies such as reducing crude steel and regulating iron ore. From a demand perspective, the continued improvement in real estate data has offset the impact of natural conditions such as the current rainy season. However, the weak market expectations for demand also limit the improvement of market confidence. However, April is still the peak season, and the high demand for sanitary grade stainless steel pipes is still important for prices, and further observation is needed for one or two weeks. In the short term, after this round of decline, there is still a need for shock+weak rebound adjustment, and the operation still needs to be cautious.