hardybougle334| Stainless steel: The balance of supply and demand is gradually changing, the probability of pressure on the market outlook increases

(Zhang Zhaoli, analyst of Zhuochuang Information)

[introduction] recently, the fundamental pressure on stainless steel has persisted, but Putin's visit to China and geographical conflicts have led to financial markets, and the stainless steel market has followed suit. As the fundamental pressure continues to rise, the off-season impact of superimposed traditional consumption will be enhanced, and the market decline probability will increase significantly.

Since 2024, the stainless steel market as a whole has shown a slightly volatile trend, the recent market has risen, but the trading atmosphere is general. As of May 21, the price of cold coil in Wuxi Taiyuan Iron and Steel Co., Ltd. was 14600-14900 yuan / ton, up 1. 5% during the month.Hardybougle334.37%, down 6% from the same period last yearHardybougle334.35%.

Since May, the stainless steel market has rebounded after falling. After the May Day holiday, the stainless steel market replenishment progress is not as expected, the market inventory has a certain accumulation, and then under the influence of the gradual decline of the futures market, the stainless steel market price adjusts with the weakening. In the middle of and after that, under the influence of Putin's visit to China and frequent geo-conflicts, the overall non-ferrous metals market became stronger, and the raw material nickel rose continuously, driving the stainless steel market to explore. Although the priceHardybougle334The rise led some terminals to receive goods, but the whole is still dominated by rigid demand, high-level transactions are blocked, market pressure has increased. From the perspective of the driving factors of stainless steel market trend, supply and demand pressure and financial market drive have a greater impact.

Looking forward to the future, fundamentals may continue to be under pressure

Judging from the changes from January to April, the overall supply exceeds demand. In January, the supply of goods in the market was relatively strong. Driven by replenishment before and after New Year's Day's holiday and before the Spring Festival, the gap between market supply and demand fell to a low of 722500 tons, down 29.26% from the same period last year. However, after the Spring Festival, the market inventory has accumulated, and when the terminal delivery is not as expected, the pressure of supply and demand has increased significantly, and the gap between supply and demand has been maintained at about 890000 tons, gradually changing from a decline to an increase over the same period last year. By the end of April, the gap between supply and demand was adjusted to 881100 tons, up 3.00% from a year earlier. Rising supply and lower-than-expected demand follow-up are the main reasons for the pressure on fundamentals.

It is inferred from the current performance that the market supply is expected to reduce to a certain extent in May and after the stainless steel production profit shrinks again, but with the increase of the impact of the off-season of traditional consumption, the demand side is also expected to reduce. And it is expected that the reduction space on the demand side is slightly higher than that on the supply side, so the overall supply-demand gap may rise further, but the rising space may be relatively limited. It is highly likely that the overall figure will be maintained at around 900000 tons. Affected by this, the fundamental pressure of stainless steel increases unabated, or forms pressure on the stainless steel market.

The probability of market decline rises in June, but there are still optimistic expectations in the future.

Judging from the changes in the stainless steel market monitored by Zhuochuang Information over the years, since 2010, the overall price decline probability of the stainless steel market from January to April has shown a gradual increase, of which the probability of rise and fall in May is basically the same, but the probability of decline in June has risen to 86%. Although the overall market space for stainless steel in 2024 is relatively small, it will be realized in January and February.Hardybougle334The positive rise in prices and the varying degrees of decline in the market in March and April are in line with the change in the probability of historical rise and fall. Since May, the center of gravity of stainless steel prices has risen to a certain extent, driven by the high base at the beginning of the month and financial market news.

In June, considering that as the impact of the sudden news gradually dissipates, the subsequent news of US tax increases on electric vehicles, medical supplies, and solar products in China may be a drag on the demand side, increasing the possibility of pressure on the stainless steel industry in June. On the whole, after the short-term support of the stainless steel market, the market trend may be in line with the law of historical ups and downs, and the risk of a high decline in June is more likely. After entering the third quarter, considering that as the year-end replenishment is expected to pick up, the impact of the traditional consumption season is increasing, and the expectation of a gradual rebound in stainless steel demand is also strong, when the performance of the stainless steel market is expected to turn optimistic again.