Today, the domestic stainless steel leader TISCO Stainless (000825) reported a reduction in production. In June, the Agency’s 300-series cold and hot rolling contract supply volume continued to be reduced by 30% on the basis of the contract amount in May, and the hot-rolled medium board maintained 5 Monthly supply; 400 series to maintain supply unchanged. On the same day, Pohang and Zhanggang Group in Zhangjiagang disclosed the news of production cuts. Industry analysts believe that the limited production of stainless steel companies is intended to reduce inventory and stabilize prices. The optimistic expectation is that in July, the stainless steel industry may turn a turning point, thereby reversing the passive situation in which the industry's economy has been declining since the second half of last year.
Han Jianbiao, the director of the unit's stainless steel channel, said that in the second half of last year, the price of stainless steel, which was affected by changes in the price of nickel, turned down and fell more than nickel prices, and the overall profitability of the stainless steel industry continued to decline. The fundamental reason is that the increase in production capacity exceeds the increase in demand, and the market is experiencing oversupply. If industry leaders begin to reduce production, they do not rule out a turning point in July this year.
Han Jianbiao said that the company's production cuts are mainly in the stainless steel 300 series. This series of products is a large change in the price of stainless steel, but also the direction of the industry. The reduced production of this series of products helps reduce inventory and stabilize market prices. This year, the price of 304 series stainless steel products has dropped from 32,800 yuan/ton to 29,000 yuan/ton. The price per ton of steel decreased by 3,280 yuan/ton, a decrease of less than 10%. The price of raw material nickel, which has the largest impact on the price fluctuation of stainless steel, also dropped from 33,000 U.S. dollars/ton to 23,000 U.S. dollars/ton at the beginning of the year, a drop of 30%. If the nickel content is 8%, the cost per ton of stainless steel will fall by 4000-5000 yuan. Therefore, for stainless steel companies, reducing the 300 series supply will help delay the decline in steel prices. Under the background of declining costs, the profitability of steel enterprises will be greatly improved.
However, for the stainless steel industry, it is still facing overcapacity pressure in 2008. With the release of the stainless steel production capacity of Tangshan Iron & Steel, Thai Steel and Guangzhou Lianzhong, they have been gradually released. Stainless steel industry capacity reached 8 million tons, and actual demand was 6.9 million tons. Therefore, for stainless steel companies, reducing production or adjusting industrial structure is still a top priority.
Han Jianbiao, the director of the unit's stainless steel channel, said that in the second half of last year, the price of stainless steel, which was affected by changes in the price of nickel, turned down and fell more than nickel prices, and the overall profitability of the stainless steel industry continued to decline. The fundamental reason is that the increase in production capacity exceeds the increase in demand, and the market is experiencing oversupply. If industry leaders begin to reduce production, they do not rule out a turning point in July this year.
Han Jianbiao said that the company's production cuts are mainly in the stainless steel 300 series. This series of products is a large change in the price of stainless steel, but also the direction of the industry. The reduced production of this series of products helps reduce inventory and stabilize market prices. This year, the price of 304 series stainless steel products has dropped from 32,800 yuan/ton to 29,000 yuan/ton. The price per ton of steel decreased by 3,280 yuan/ton, a decrease of less than 10%. The price of raw material nickel, which has the largest impact on the price fluctuation of stainless steel, also dropped from 33,000 U.S. dollars/ton to 23,000 U.S. dollars/ton at the beginning of the year, a drop of 30%. If the nickel content is 8%, the cost per ton of stainless steel will fall by 4000-5000 yuan. Therefore, for stainless steel companies, reducing the 300 series supply will help delay the decline in steel prices. Under the background of declining costs, the profitability of steel enterprises will be greatly improved.
However, for the stainless steel industry, it is still facing overcapacity pressure in 2008. With the release of the stainless steel production capacity of Tangshan Iron & Steel, Thai Steel and Guangzhou Lianzhong, they have been gradually released. Stainless steel industry capacity reached 8 million tons, and actual demand was 6.9 million tons. Therefore, for stainless steel companies, reducing production or adjusting industrial structure is still a top priority.
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