Stainless Steel Prices Are Affected By These Factors
①Business Cycle
Economic cycle The iron and steel industry is a basic industry of the national economy. Cyclical fluctuations in the national economy are an objective economic law, and the iron and steel industry is one of the industries most closely related to the economic cycle. It can be said that the stainless steel market fluctuates with the fluctuation of the macroeconomy.
②Raw Material Cost
Raw material cost There is a strong correlation between the price of stainless steel products and the price of raw materials (mainly nickel and chromium), and product prices fluctuate due to changes in raw material stainless steel prices. Nickel is primarily used to produce stainless steel, and consumption is mainly driven by stainless steel production. In recent years, the substantial increase in stainless steel production has driven nickel consumption.
Generally speaking, the correlation between the price of stainless steel cold-rolled coil and the price of electrolytic nickel has remained high before 2017, and there is a sudden decrease in the correlation in the short term. Since the end of 2017, the correlation between the two spot prices has declined rapidly and has recently recovered to around 0.7.
stainless-steel-coil-sheet- Factory – Warehouse_0013
There are two main reasons: First, the supply and demand structure of nickel in the future may be divided into two industrial chains of “ferronickel-stainless steel” and “electrolytic nickel-power battery”. The demand premium brought by the broad development prospects of power batteries to electrolytic nickel is the main reason for the decline in the price correlation between stainless steel and electrolytic nickel since the fourth quarter of 2017.
Second, with the development of the stainless steel production process, to reduce costs, companies use a large amount of ferronickel instead of electrolytic nickel to smelt stainless steel, which reduces the correlation between the cost of stainless steel and the price of electrolytic nickel. Therefore, the correlation between the two spot prices will remain at a relatively low level in the future.
③Market Supply and Demand
Market supply and demand Since the beginning of the new century, driven by demand growth, the world’s stainless steel production capacity has increased substantially. The world’s stainless steel production centers have shifted from developed countries in Europe and America to Asia, especially the emerging Asian economies represented by my country. In the context of the substantial increase in stainless steel production in Asia, the current stainless steel market has begun to show signs of relative oversupply, putting pressure on stainless steel prices.
With the economic development and the improvement of living standards, as well as the requirements for the appearance and service life of steel, the application of stainless steel will become more and more extensive. In the long term, the growth of stainless steel demand will support stainless steel price.
④Technological Innovation
Technological innovation The impact of technological innovation on the international stainless steel market includes: first, technological advancement will improve the function and performance of products to a certain extent, broaden the application of stainless steel, stimulate the market demand for stainless steel products, and increase market prices;
Second, the impact on the production process can increase labor productivity and improve the structure of stainless steel production, and reduce the global stainless steel price;
Third, scientific and technological progress may produce new alternative materials, which will reduce the demand for stainless steel and reduce its market price. It seems that new metal materials that can completely replace stainless steel have not yet appeared. Therefore, the impact of technological innovation on the stainless steel market is currently difficult to assess.
⑤Economic Policy
Economic policies. Changes in national macroeconomic policies, monetary policies, foreign exchange policies, and import and export policies. For example, the country’s policies to promote consumption upgrades will stimulate the demand for stainless steel terminal products, or certain countries impose trade barriers on some stainless steel products. Factors also have a certain impact on the stainless steel price.
Huaxiao Stainless Steel Price
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