Looking forward to the price trend of stainless steel in 2022: rising first and then suppressing? [institutional point of view]

Recently, the relevant organizations have made a prospect for the stainless steel market in 2022, and some of the views are summarized as follows:

Citic Futures:

For the trend of stainless steel prices in 2022, we think that the center of gravity moves down, the price rises first and then suppresses, the performance is strong in the second and third quarters, and the overall fluctuation decreases.

The production of Ferro Nickel in Indonesia has been accelerated, but some projects have been converted to high matte nickel, the increment of supply and demand of ferrochromium is weaker than this year, the supply and demand of ferrochromium is loose, and the cost of stainless steel is downward; domestic energy consumption control is loosening, Indonesian stainless steel continues to impact the domestic market, and stainless steel supply resumes; the real estate policy is loosening, the financial pressure is relieved, there are still expectations for completion, chemical production expansion continues, and stainless steel demand is cautiously optimistic. On the whole, the supply and demand of stainless steel is gradually surplus, the price is weak, and the price range is expected to be 14500-20000 yuan / ton.

First, the production of Ferro nickel in Indonesia is accelerated, and the margin of supply and demand tends to be loose: with the relief of the epidemic, the commissioning of ferronickel in Indonesia will be accelerated, the control of domestic energy consumption will be loosened, and the supply of ferronickel will be restored. However, due to the conversion of some ferronickel in Indonesia to high nickel matte, it is expected that Ferro nickel will remain tight in the first half

Second, the supply of ferrochromium is restored, and the tension is eased: the control of energy consumption is loosened, the supply of ferrochromium is restored, and the tension between supply and demand is alleviated, but the new production capacity of domestic high energy-consuming industries is strictly controlled, while the overseas capacity expansion is relatively slow, and the demand for stainless steel is strong. the increment of ferrochromium supply is relatively limited, and the rising electricity price increases smelting costs, so ferrochromium prices should not be too pessimistic.

Third, stainless steel supply resumes and consumption is cautiously optimistic: stainless steel production capacity in Indonesia is put into production and continues to impact the domestic market, while domestic energy consumption control is loosening, supply will be restored, and stainless steel supply pressure is greater; the real estate policy is already at the bottom, the financial pressure of housing enterprises will be alleviated, enterprises will speed up completion sales, the completion cycle is expected to continue, chemical production expansion continues, we are cautiously optimistic about demand, and the overall supply and demand of stainless steel is loose.

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South China Futures:

Looking forward to 2022, the price of nickel may rise slightly, while stainless steel will be driven by the rise in the price of nickel, but the increase may not be as high as that of nickel. The macro-economy in 2022 is expected to be tight, and there is a certain upward pressure on the non-ferrous metal plate. Compared with copper, aluminum and other non-ferrous metals, nickel is less affected macroscopically and mainly depends on its own fundamentals. Supply-side capacity in Southeast Asia will be gradually released, while refined nickel imports from Russia, Norway and Canada will decrease with the reduction of nickel ore grade, and the overall supply may remain unchanged. On the demand side, in the context of the country's dual-carbon policy, the target of stainless steel production in 2022 will be the same as in 2021. According to our valuation + driven model, the support of nickel price is still there, and the continued outbreak of new energy will become the driving force of nickel price rise.

For stainless steel, a stable supply is good news for prices, but weak demand expectations are not good for prices. Pessimistic expectations for the real estate industry may reduce the use of stainless steel commodities and building materials. In 2022, the operating range of Shanghai nickel is 138000-176000 yuan per ton, and that of stainless steel is 16000-21000 yuan per ton.

MEPS: stainless Steel Industry will remain bullish in 2022

2021 will be an extraordinary year for the global stainless steel industry. Most companies throughout the supply chain will report very strong financial results during this period. Steelmakers have benefited from a sharp rise in sales prices. Although their input costs have increased. After several consecutive quarters of growth, many of these companies have made record profits.

Despite the slowdown in activity at the end of the year, most market participants remain optimistic about the outlook for 2022. However, there are differences in the short-term outlook for demand and prices for stainless steel. In recent months, buyers have become more cautious when buying. The spread of Omicron variants, rising inflation and continued supply chain constraints will continue to challenge business operations in the new year.

As the end of 2021 approaches, stainless steel prices in all regions remain at a high level. The base price of the MEPS European average of 304 cold-rolled coils is now equal to the all-time high recorded in January 2007. In the US, comparable figures have not yet reached their previous peak, but are at their highest level in 14 years.

Nonetheless, the forward-looking view of global prices is becoming more pessimistic-especially for coil products that have risen the most recently. However, the trading value of stainless steel is not expected to collapse. Prices are expected to fall more slowly than they have risen in the past 12 months.

In Asia, lower expectations of raw material costs, coupled with weak seasonal demand, could put negative pressure on sales value ahead of the Lunar New year. However, production cuts in the region should limit supply and limit any price decline.

A further rise in the North American base in the first half of next year is expected to be limited by a reduction in procurement activity. In addition, buyers have ordered a large number of materials from domestic and foreign suppliers. This will begin in early 2022. However, the supply of domestic stainless steel producers is expected to remain limited. This will help to keep prices at a high level in the short term.

The trading volume of flat products in Europe is expected to rise in the early part of the new year-especially cold-rolled coil and sheet, whose supply remains tight. However, inventories of most grades and sizes are increasing. This, coupled with weak demand, is expected to limit the level of price increases that stainless steel buyers are prepared to accept during this period.

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