2021 CNY holiday plans at Chinese stainless steel downstream processors

SHANGHAI, Feb 5 (SMM) — As the Chinese New Year approaches, all regions are about to enter the peak of returning home. However, due to the recent spread of pandemics across the country, "whether to return home for the New Year" has become the focus of recent heated discussions. Strict prevention and control measures have also been introduced in various places. 29 provinces, autonomous regions and municipalities have proposed "stay put during the holiday" as of January 14 to reduce the risk of infection and exposure during Spring Festival travel rush.

SMM carried out a market survey on holiday time for stainless steel trading companies and downstream industries, the results are as follows:

Wuxi: Some plants will have a holiday until January 20, and others until the end of the month. The current order situation is normal, and the lack of cargoes in the market is more importantly related to the delay in the delivery pace of steel mills.

Wenzhou: The steel pipe storage yard has been on holiday since January 15, and the goods cannot be picked up and shipped amid tepid business.

Foshan: Holidays began one after another on January 18, and the concentrated holidays are still at the end of January to the beginning of February.

A large state-owned enterprise stated:

1. The stainless steel trade may arrange a holiday at a staggered peak, because if it is only the trade, it can be handled even at home. However, stainless steel processing is still relatively busy at present, and it is estimated that the holiday will be postponed than before.

2. From the perspective of downstream stainless steel companies, the order performed better than the previous few years, which was also one of the reasons why steel mills were basically producing at full capacity, while the market inventory continued to hit new lows. At present, local governments are advocating "stay put during the holiday”, and there are already red envelopes for migrant workers who stay put during the holiday, and awards for companies which don’t stop working during the CNY holiday. In addition, the overseas orders of stainless steel downstream companies are excellent. Many industry giants under Baowu said that they will shorten the holidays during the CNY and work overtime to meet overseas demand. This can basically show the high operating rates of the downstream.

Stainless steel export data improved month by month from January to November. After the export data from December to January is released, it is likely to be higher than the same period in the previous year. The number of days of social inventory has been relatively stable, and it is low compared with the previous year. The level is roughly the same, and it can be seen that the consumption of stainless steel does have a better performance.

SMM believes that weather problems and pandemic problems in some regions has limited impact on the industry. Many small and medium-sized enterprises still have plans for normal holidays, which will not be advanced or postponed. However, due to the increasing foreign trade orders, the current demand in the stainless steel industry is indeed better than the same period in previous years, so foreign trade-related companies are likely to shorten or postpone holidays, especially some large companies that need to maintain production in order to deliver orders in a timely manner. Prices of stainless steel are also at a relatively high level at present. If downstream demand is not weak in the off season, it will help maintain the stability of market prices.