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1)
Market demand for stainless steel will go up continuously
(approaching 6 million tons), while the growth rate will decrease slightly.
Per capita stainless steel consumption in 2005
will exceed 4kg, keeping at the average level in the world, and the growth
rate of global stainless steel consumption will be valuable for our
reference, stainless steel consumption rate in China has generally kept the
same as or a little higher than the average level (7-10%).
Based on the periodical change in global
stainless steel industry since 1990, stainless steel consumption in 2006
will be stagnant affected by the slowing down development rate of China
economy.
2) Stainless steel productivity will expand in China domestic market.
The second periodical project of Baosteel
Stainless Steel Branch has started operation, and they will realize batches
of production in 2006. it is predicted that the productivity of the 1st
& 2nd grade projects will reach 1 million tons, up 300 thousand
tons against that of 2005.
HR projects and steelmaking projects in Taiyuan
Steel & ZPSS will be finished in 3Q.06, and they can realize batches of
production since 4Q.05. It is predicted that stainless steel productivity
may go up by 2.5 million tons in 2006.
Jiuquan Steel’s steelmaking project has started
the trial run, and if it realizes 1/3 of the total productivity, it can
increase 150 thousand tons of productivity in 2006.
The productivity of a batch of medium stainless
steelmaking or HR enterprises starting operation one after another since
2004 has exceeded 1 million tons, and it is possible for them to increase
another 300 thousand tons of productivity in 2006.
Based on the primary prediction, stainless crude
steel & HR output will go up by 1 million tons in 2006 compared with that of
2005.
About 1.5 million tons of HR productivity has
been released gradually in 2005, realizing 200 thousand tons of output, and
it is predicted that the output may increase by another 400 thousand tons in
2006.
In 2006, Jiuquan Steel & Tianjin Pipe Steel will
put two CR mills into operation, increasing 400 thousand tons of
productivity, and it is predicted that newly added output may reach 100
thousand tons.
Based on the primary prediction, CR production
in China may rise by 500 thousand tons in 2006.
3) Trying to cut the import and increase export has been the major task
for China stainless steel manufacturers.
Steelmaking & HR products output will go up by 1
million tons in 2006, while market demand can only increase by 500 thousand
tons. CR products output may rise by 500 thousand tons, while the market
demand can only increase by 300 thousand tons.
In order to keep the balanced supply & demand in
China domestic market, domestic manufacturers and distributors have been
coordinating to cut the import as well as to raise the export. This is
profitable for the general stainless steel industry.
Firstly, the traditional importers should change
toward China domestic manufacturers, meanwhile the manufacturers should also
try to satisfy the demand of the consumers in consideration of the products
volume, quality and specs.
Secondly, manufacturers and distributors should
combine with each other to keep stainless steel price at low level. On the
one hand, this will attract the downstream users and importers to procure
from China domestic market, on the other hand, it is good for increasing
export.
Thirdly, strengthening the construction of
pre-alarm system so as to resist the anti-dumping policies of foreign
enterprises.
All in all, if we cannot reduce import and
increase export effectively, serious surplus supply situation may appear in
China, which may worsen stainless steel market situation in China.
China CR stainless steel market has suffered
this problem in 2005, and this mistake should be avoided in 2006.
4) Preview
of stainless steel market price in China for 2006
Minimizing stainless steel price in China has
not only been the request from reducing import & increasing export, but also
been affected by the low manufacturing cost.
5) Conclusion:
We should cherish the opportunity to modify
stainless steel structure, stick to the scientific development idea, follow
the course the new industrialization road and carry out the new steel
industry development policy. Put forward and abide by the accessory
policies, control the blind investment in stainless steel industry, prohibit
the repeated construction at low level and wash out the inferior stainless
steel.
Production, circulation & consumption etc. links
should notice their common profit and coordinate with each other so as to
realize win-win situation. Esp. steel industry on behalf of domestic domain
should change from extensive mode to scientific mode as well as try to
satisfy the end users’ demand.
Related governmental
sections and industries should lay their emphasis on actualizing industrial
policy and regulating market order.
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