Stainless steel prices in Asia have plateaued for the time being. However, many analysts believe that this is a temporary slowdown in the run-up to the Chinese New Year.
After that, the market is likely to continue its inexorable rise of the past two years.
China’s stainless steel market ramps up production
According to ArgusMedia, China’s production, imports and consumption of stainless steel increased in 2020. China produced 30.14 million tons of crude stainless steel in 2020, up 2.51% from 2019.
Meanwhile, imports rose to 1.81 million tons, up 61.33%.For example, imports from Indonesia increased 24.3% year-on-year to 1.1 million tons in the first nine months of 2020.
Declining exports due to tariffs.
Exports, on the other hand, were down.Trade disputes between China and the United States, the European Union, Japan, South Korea and India led to the imposition of tariffs on shipments.
As January came to a close, stainless steel futures on the Shanghai Futures Exchange continued to rise, Reuters reported. Rising commodity prices and expectations of strong demand after next month’s Chinese New Year vacations drove gains.
“Recent Chinese nickel pig iron production has continued to fall, nickel pig iron prices have risen steadily…. Stainless steel costs will remain high,” Reuters reported, meaning the market expects prices to rise further after the holidays.
Weakening of raw material prices possible in 2021
Some weakening in commodity prices is likely later in the year. However, analysts expect the first half of 2021 to continue to benefit from the tailwinds of stimulus measures and rising optimism due to the introduction of vaccinations.
On the other hand, any significant setback in vaccine introduction or the unexpected spread of mutated virus strains that prove immune to existing vaccines would undo that optimism.
In China, prices are expected to continue to develop well in 2021.
Source: agmetalminer.com
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