In the first quarter of 2024, the stainless steel market continued the downturn of last year, the domestic new low-cost stainless steel production capacity has been put in place, the stainless steel oversupply situation has further intensified, the industry is facing a more complex and severe business development and market competition situation, and high-quality development has entered the critical stage.
On April 25, at the second meeting of the Executive Council of the first session of the Stainless Steel Branch of the China Iron and Steel Industry Association, the participants shared their own solutions to cope with the current development situation, and put forward relevant suggestions on the next high-quality development of the industry.
In terms of strengthening self-discipline, stainless steel enterprises should take the initiative and actively appeal. In the context of overcapacity in the stainless steel industry, some enterprises have taken the initiative to actively reduce production and achieved good results, such as the company by controlling 430 stainless steel to a reasonable amount to ensure the stability of the price of the product. There are also many business representatives called for the entire stainless steel industry, regardless of production capacity or output, to strengthen industry self-discipline, the formation of mechanisms and implementation of action to avoid vicious competition situation. It is worth noting that some enterprises reflect that the domestic is planning a new stainless steel pipe production capacity of nearly 2 million tons, combined with this year’s domestic petrochemical project demand for stainless steel pipe fell sharply, may exacerbate the excess capacity of stainless steel pipe.
In the expansion of applications, it is necessary to have a leading unit to organize and form a joint force. Many participants believe that in the next 3 to 5 years, the stainless steel market will be incremental, mainly by product upgrading, more affordable, and expand the application field, hope to have a leading unit to expand research in the field of stainless steel application, and explore the potential of stainless steel in material substitution, while suggesting that enterprises actively explore and deepen cooperation in the field of stainless steel application. Strive for a larger market.
In the aspect of export, it is suggested to formulate differentiated stainless steel export tax rebate policy. Stainless steel has a high strategic value in the global industrial chain, with large market demand and broad prospects. In April 2021, the Ministry of Finance canceled some export tax rebates for steel products, including the cancellation of 13% export tax rebates for stainless steel products, resulting in a substantial increase in export costs and a certain inhibition of stainless steel exports. The participants suggested that the state restore the export tax rebate policy of stainless steel products, at the same time, the tax code of high-tech and high value-added products is subdivided, and differentiated tariff policies are formulated to expand the export scale of China’s high-end stainless steel products and promote the healthy development of Chinese manufacturing in the international market. In addition, some companies have suggested that relevant export encouragement policies be developed for stainless steel parts.
In terms of supply chain security, it is necessary to strengthen the ability to supply nickel and chromium resources. Nickel and chromium resources are the main raw materials for stainless steel production, accounting for about 70% of stainless steel production costs. China’s consumption of nickel and chromium raw materials is huge and highly dependent on imports, and the purchase price is vulnerable to international capital interference. In the future, South Africa’s chromium ore export tax increase and the Philippine nickel ore ban policy are expected to be strong, which will have major risks and challenges for China’s stainless steel industry chain and supply chain security. Many business representatives suggested that in order to ensure the healthy development of China’s stainless steel industry and improve the competitiveness of the industry, we should strive to win the support of China’s enterprises in the construction of resource security bases in countries rich in chromium and nickel resources, and further coordinate Indonesia, South Africa and other countries to relax export restrictions.
In terms of green development, it is recommended to accelerate the implementation of relevant policies to support short process steelmaking. The participants reflected that at present, electric furnace steel short process production enterprises are facing punitive electricity prices, such as enterprises spend more than 1 million yuan per month on the basis of normal electricity prices, and hope that relevant policies will be implemented as soon as possible to support short process electric furnace steelmaking.
In terms of relevant standards, we should speed up the improvement and unification. At present, there are more brands of stainless steel on the market, and enterprises have also innovatively launched some new brands, combined with previous downstream associations that do not understand the difference between different brands of stainless steel, it is recommended to unify standards. There are also representatives of enterprises in particular, hope that the state in the 200 series stainless steel to introduce relevant standards, regulate the 200 series stainless steel market, while the backward stainless steel production capacity and process constraints. In addition, some delegates raised the need to pay attention to the unification of stainless steel scrap related standards.
In terms of structural adjustment, we must unswervingly take the road of variety and efficiency. The participants introduced a lot of work done by their respective enterprises in the adjustment of the structure of stainless steel products, such as enterprises concerned and turned to the market segment, began to produce stainless steel wire (3692, -21.00, -0.57%); Some enterprises work hard to improve their own technical level; Some enterprises take the initiative to reduce production or no longer produce products with poor benefits, focusing on high-end differentiated products.
In addition, the delegates also proposed that attention should be paid to the development predicament of stainless steel enterprises with multi-variety, small-batch, personalized and customized production characteristics.
