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1.4404 Stainless Steel Sheet Market Supply Pressure Is Still Relatively Large

Nov. 26, 2018

The key factors affecting the 1.4404 Stainless Steel Sheet market today are the lack of external micro-boost factors and the continued high output of crude steel under the economic restructuring. Therefore, it will take some time for the successive downward trend to change, but after the low level consolidation, it is expected to gradually appear weak and stable format.

First, the real estate industry is undergoing a deep adjustment, investors are on the sidelines, while also curbing the demand for construction steel market. According to statistics, in the first half of this year, the sale of commercial housing reached 649.87 million square meters, a decrease of 8.3%; the newly started area of the house was 143.82 million square meters, a decrease of 10.5%. At the same time, most of the downstream steel industry is in a low-season state, and all of the above factors have played a role in inhibiting steel demand.

Second, the supply pressure of the 1.4404 Stainless Steel Plate market is still relatively large. In the first ten days of September, the daily average output value of crude steel in the national key steel enterprises was 1,795,400 tons, up 7.1% from the previous one, and the operating rate of steel mill blast furnaces reached over 90%. The pattern of oversupply remains unchangeable.

Third, the tightness of funds has forced steel mills to ship at low prices. At present, the asset-liability ratio of domestic steel mills is generally high. According to statistics, by the end of June this year, the total liabilities of 86 large and medium-sized steel enterprises across the country have exceeded 3 trillion yuan. In order to speed up the return of funds for shipments, domestic steel mills have successively lowered the ex-factory prices, and some manufacturers have also increased their efforts to recover.

Fourth, the social inventory of the stainless steel plate market has decreased, and the inventory of steel products has increased. National steel social inventories have been reduced for 28 weeks. According to market monitoring, by September 19, the social inventories of steel in 29 key cities nationwide were 10.656 million tons, a reduction of 99,200 tons from the previous week. By the end of September, the inventory of steel products of key enterprises was 15.136 million tons, an increase of 6.3% over the previous one.

1.4404 Stainless Steel Sheet

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