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Poor operation rate and delayed stainless steel demand

2020-02-14 16:39:16

Beijing, February 14(Antaike)-As the spread of novel coronavirus pneumonia epidemic situation, the starting date of enterprises keeps delaying. The uncertainty of stainless steel enterprises in Foshan and Wuxi when return to work is increasing, so far some enterprises in Foshan have received a notice to resume work on March 1.


At present, the impact on stainless steel exports has not yet fully appeared, the follow-up situation would have to be reevaluated. Some enterprises have taken orders and some could not deliver goods on time. On February 5, Ministy of Commerce of China General Office issued and printed “Notice on helping foreign enterprises to overcome difficulties and reduce losses for Novel Coronavirus Epidemic”, the delayed resumption of work due to the outbreak is a force majeure factor, the enterprisese can go to the relevant deparments to issue certificates.


Stainless steel mills still keep normal production while the logistics, processing, and downstream customers are more affected by the outbreak, thus oversupply is unavoidable. Indonesia Delong stainless steel project was commissioned on February 3, its principal product is stainless steel square billet and the products will be supplied to Jiangsu Delong wire plant. Tsingshan Holding Group Co., Ltd. (Tsingshan) currently remains normal production, the impact on sea transportation is limited, raw material supply is no problem, and stainless steel output is expected to keep growth this year. In 2019 Tsingshan produced 9.19Mt of stainless steel, with a gain of 26.06% y-o-y.


The contradiction between stainless steel supply and demand will show different phases, it is hard for downstream customers to obtain processing and distribution of stainless steel marterials so far, stainless steel supply will increase obviously after recovery of logistics and transportation, we estimate stainless steel price will see downward pressure in near future.




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