[SMM analysis] inventory transfer stainless steel to reverse?

SMM4, January 1:

According to statistics, the social inventory of stainless steel at the end of March was slightly lower than that in February. The inventory in Foshan and Wuxi was about 1.123 million tons, down 61000 tons from the end of February, down 5.18 percent from the previous month.

On the one hand, the decline in inventory is mainly due to the price reduction of traders in March and the consumption of inventory; on the other hand, due to the large reduction in production of steel mills in February, the arrival of goods in March has decreased to a certain extent, superimposed on the certain consumption of social inventory by centralized procurement in the lower reaches of early March, resulting in a small decline in the social bank in March. However, with the gradual recovery of steel production and the non-continuous improvement in downstream demand, stainless steel stocks are expected to increase slightly in April.

Since mid-March, the rework rate of industrial enterprises above the national scale has increased rapidly, and the rework rate of other provinces (autonomous regions and municipalities) has exceeded 90%, of which Zhejiang, Jiangsu, Shanghai, Shandong, Guangxi and Chongqing have reached nearly 100%.

According to SMM, the output of stainless steel plants in March rebounded from February, totaling 2.04 million tons, an increase of 13.4 percent over the same period last year, but still decreased from the same period last year, down 12.98 percent from the same period last year.

With the control of the epidemic, the output of steel mills has gradually returned to normal, with stainless steel production expected to be about 2.27 million tons in April, an increase of 11.5 percent over March.

According to investigation and understanding, although the current domestic epidemic situation has been brought under control, the demand in the downstream market of stainless steel has not completely improved; and the spread of the overseas epidemic has affected the export orders of some enterprises (the export orders of existing metal products production enterprises in Foshan have been cancelled due to the epidemic), and the export demand for stainless steel has also shrunk to a certain extent. Production has gradually recovered, while demand has failed to keep pace with the increase in supply, and stainless steel is expected to improve or remain weak in April.

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