Excess Production Capacity Undermines Stainless Steel Prices

Stainless steel prices continue to show few signs of recovery. Selling values, in Europe, have been below producers?? breakeven levels since a collapse in transaction figures, and the widespread adoption of effective pricing, in the summer of 2018.


Moderate increases, in excess of rises in alloy surcharges, were reported in the early months of this year. Now, the prospect of falling raw material costs, in combination with mediocre demand, is applying negative pressure to nominal basis figures.


Transaction values are also softening in the Far East, where activity is subdued, while production capacity continues to expand.


Section 232 action, in the United States, led to an immediate rise in domestic stainless steel prices, when first introduced. Since then, however, transaction values have fallen back to a level that is more in line with international markets.


The European Commission??s safeguarding measures were planned to prevent a flood of imports, in the wake of the US government??s actions, and have had little, if any, effect in boosting local prices, in the EU.


Market participants might expect a pricing boost from the value of one of stainless steel??s key raw materials, nickel. LME nickel stocks are at their lowest point in more than six years. Furthermore, with demand for nickel growing, due to expected consumption in the manufacture of batteries for electric cars, a deficit in supply of the metal is predicted, in the coming years.


Commodity prices, however, are influenced by a complex range of factors, beyond the market fundamentals for the particular material. It is in this context that nickel values are, currently, quite becalmed.


The main negative factor affecting stainless steel selling values remains production overcapacity. Producers in the established steelmaking regions have struggled to fill their schedules, in recent years. Now, with substantial new production capability coming on stream in countries including India, China, and Indonesia, it is difficult for sellers to make the case for increasing prices.

MEPS Forecasts Global Steel Production Growth to Slow Down

MEPS forecasts global crude steel production at 1.82 billion tonnes, in 2019. This equates to an increase of 0.8 percent, compared with the figure recorded in the previous year. A slowdown in steel demand growth is expected, as economic conditions soften, worldwide. A number of factors are adversely affecting steel consumption, including political uncertainty, rising trade tensions and moderating business confidence.

MEPS predicts that growth in global steel production and demand will slow in the long term, compared with the rapid expansion witnessed since the turn of the millennium. The steel industry is entering a mature phase of development. The sector faces many structural challenges, such as steel plants running at below optimal levels of capacity utilisation and government subsidies for inefficient steel mills. Nevertheless, cause for optimism about the future of the steel industry is apparent. The global population will continue to rise and demand for housing, infrastructure, machinery and consumer goods will persist. Furthermore, with its high degree of recyclability, steel will play a key role in the ??circular economy??, which aims to minimise waste and make the most efficient use of resources.


China overtook Japan as the world??s largest crude steel producing country, in 1996. At that time, Chinese steel output was just 13 percent of the world total. The country??s share of global production had increased gradually through the 1980s and 1990s, but then it surged in the 2000s. Rapid capacity expansion was undertaken to feed growing domestic requirements for steel. By 2010, Chinese output accounted for 45 percent of the world total. China??s crude steel production had climbed fivefold, from 127 million tonnes in 2000 to 639 million tonnes in 2010. Growth in China??s capacity, production and consumption slowed, in the 2010s, compared with the previous decade but, nonetheless, remained substantial.

In the past few years, the Chinese government has put an increasing emphasis on addressing the problems of excess steelmaking capacity and high pollution levels. In the first half of 2017, hundreds of induction furnaces, with a combined annual production potential of approximately 120 million tonnes, were closed. Subsequently, the national authorities are now able to capture a more accurate figure for the country??s total steel output, for inclusion in the official statistics. MEPS had previously highlighted irregular finished steel output tonnages from the reported crude steel production figures. A number of electric arc furnaces were installed to replace the obsolete induction furnaces. In the long term, increased domestic scrap availability and environmental concerns should increase the attractiveness of the EAF steelmaking route. Nonetheless, the BOF route is likely to remain the main source of steel supply as a result of recent investments in blast furnaces.


India surpassed Japan as the world??s second largest steel producing nation, in 2018. The government has set a target of raising annual steelmaking capacity to 300 million tonnes, with an eighty-five percent plant utilisation rate, by the 2030/2031 fiscal year. Current levels of growth in steel demand and supply make this aim difficult to achieve. Amongst the many obstacles are the availability of infrastructure, land and raw materials, along with the substantial capital expenditure required by the, already indebted, domestic steelmakers. Nonetheless, MEPS expects the increases in Indian steel production and consumption to be the highest in the world, over the long term.


The United States was the third largest steel producing nation, between 2000 and 2014, with the exception of 2009 amidst the Great Recession. Fiscal stimulus and Section 232 import measures have provided a boost to US steel demand and production, in the past couple of years. However, the long-term outlook is relatively pessimistic. Economic activity is forecast to slow. A rising risk of recession, over the forecast period to 2023, is apparent.


South Korea
South Korea became an established top ten steel producing country in the late 1980s. The country??s crude steel capacity increased by around 70 percent between 2000 and 2013. Output is forecast at around 72 million tonnes per year, over the forecast period. Despite the expectation of minimal output growth, in the coming years, plant utilisation is likely to remain at a relatively high level.


Since 1983, Brazil has been amongst the world??s ten largest steel producing countries. A recession in 2015 and 2016 had a substantial negative impact on steel output and demand. A modest recovery is anticipated over the forecast period. Growth in gross domestic product is predicted to average more than 2 percent in the 2019-2023 period.


Iran is likely to feature in the world??s top ten steelmaking nations, for the first time, in 2019. The authorities target steelmaking capacity of 55 million tonnes per year by 2025. The country benefits from substantial reserves of natural gas and iron ore. However, MEPS predicts that the long-term goal will not be achievable, due to the substantial levels of finance and infrastructure required. Nonetheless, considerable growth in steel output is envisaged. New electric arc furnace steelmaking and direct reduced ironmaking capacity is being brought on-stream.


Vietnam should establish itself inside the world??s top fifteen largest steelmaking nations, in 2019. It is forecast to be the third main contributing country, after India and Iran, to global crude steel production growth, in the period to 2023. A substantial amount of new steelmaking capacity is scheduled for installation. MEPS?? predictions account for the possibility that not all the plans will come to fruition, due to financing issues and import competition.

stainless steel coil

Is this the jungle law of the stainless steel market? But more we need are positive energy!

As the saying goes??maybe, we can see the truth but we can’t get an insight into one??s mind.

Recently, the differences between 304 and 304D stainless steel become a controversial topic.

The sales boom driven by the new 304D stainless steel has gradually faded away. Recently, the flat-panel merchants suddenly began a heated discussion, reminding customers to distinguish between 304 and 304D stainless steel clearly!

That makes quite a few material suppliers feel unacceptable.

New products made of 304D stainless steel are developed to meet the different needs and tastes of customers. And if people sell 304D stainless steel as 304 stainless steel, it is a matter of ethics and integrity.

However, many people responded that even if there is no 304D stainless steel, manufacturers will sell 304J3 stainless steel as 304J1 stainless steel and 304 stainless steel.

In fact, we should regard these phenomena as manifestations of the “law of the jungle.” No matter how strong the lion is, it will not actively attack the hyena unless the hyena poses a great threat to it.

If we compare 304 stainless steel to a lion and likened the new product of 304D as a hyena, 304D stainless steel is an emerging threat for 304 stainless steel in decorative sheet market. Therefore, the intense discussion held by decorative sheet sellers may be a kind of counterattack.

In any event, we should be gratified that there are always people who are contributing to establish and maintain a good market order.

In conclusion, the promise written down is to avoid the dispute of any quality problem. After all, customers have the right to choose and know. And it is a test of integrity that whether suppliers will fulfill their notification duty or not.

Choose your best one metal reusable drinking straws from Vigor Dragon!

Old habits die hard and creating new ones is a pain. But it does help that reusable metal straws are so pretty to look at. They deserve to be treated like all your other home utensils.
Here, we introduce you to the most common metal reusable straw materials: stainless steel and titanium. You??ll also find insights on how this is all tied together to your lifestyle.


  • Stainless Steel Straws

Stainless steel is the most basic durable material that resists oxidation and corrosion.?Made of food grade material, a?304 stainless steel straw?is a safe and affordable option to drink out of. At the same time, Vigor Dragon can do SS316 as material for stainless steel straws. We have many feedbacks from Australia.


  • Titanium Straws

Titanium?is the most expensive material but also poreless. It??s the safest material for the long term and it also won’t release that metallic taste.
The colors in the straws are from the titanium itself instead of color dyes and lightweight titanium also means your cup won??t tilt when you finish drinking. Compared with stainless steel straws normal weight, a 8mm diameter titanium straw is only 13g.


Now, you know everything you need to know about metal reusable drinking straws and it should be easy to choose one. Vigor Dragon have many choices for you!

stainless steel coil

Iron ore prices fall for a second day

Iron ore prices fell for a second consecutive session on Thursday, weighed down by speculation of further temporary curbs on steel output in northern China.

According to Metal Bulletin, the spot price for benchmark 62% fines slipped 0.7% to $73.36 a tonne, adding to the 0.8% decline seen on Wednesday.

Higher grade ore also softened with the price for 65% Brazilian fines dipping 0.5% to $87.70 a tonne.

Lower grade ore managed to escape much of the selling pressure with 58% fines falling buy a solitary cent to $47.51 a tonne.

The small losses mirrored similar price movements in Chines steel futures which closed marginally below the levels seen on Wednesday evening.

A steady increase in Chinese iron ore port inventories, along with speculation about further industrial curbs in northern China on environmental grounds, also heaped pressure on?bulk futures traded separately in Dalian.

According to SteelHome Consultancy, Chinese iron ore port inventories rose to the highest level since mid-November last week, fitting with reports of increased restocking demand.

Separately, a statement from China??s Ministry of Ecology and Environment noting the risk of severe smog in northern China until January 14 helped spur speculation that temporary industrial production curbs could soon be introduced, potentially impacting demand for raw materials temporarily.

The weakness in spot and futures markets came despite the release of soft?Chinese inflation data for December, seeing chatter about the potential for more stimulus measures to be rolled out in the coming months intensify.

Continuing the theme seen throughout the week, Chinese futures remained choppy in overnight trade on Thursday with all major contracts ending fractionally above the day session close.

SHFE Hot Rolled Coil ?3,424 , -0.09%
SHFE Rebar ?3,517 , -0.20%
DCE Iron Ore ?509.50 , 0.30%
DCE Coking Coal ?1,202.50 , 0.97%
DCE Coke ?1,941.00 , 0.08%

Trade in Chinese commodity futures will resume at midday AEDT.

stainless steel

Stainless MMI Loses Nearly 8% as LME Nickel, Stainless Surcharges Fall

by?Irene Martinez Canorea?on?JANUARY 9, 2019


The?Stainless Steel Monthly Metals Index (MMI)?dropped five points this month, losing 7.6% and currently standing at a value of 61. The current index sits just above the August 2017 level of 59 points, when LME nickel prices touched support and rebounded. The drop came as a result of lower LME nickel prices and lower U.S. stainless steel surcharges.

LME Nickel

LME nickel prices decreased in December, following a short-term downtrend that started in June 2018. Nickel prices have increased slightly so far in January, showing some recovered momentum along with other LME base metals. However, given the current commodity outlook, price increases need careful monitoring.

Source: MetalMiner analysis of Fastmarkets

Domestic Stainless Steel Market

Domestic stainless steel surcharges fell again. This is the sixth consecutive monthly drop in stainless steel surcharges this year, starting in July 2018, after surcharges peaked. The 316/316L-coil NAS surcharge fell to $0.80/pound, while the 304/304L surcharge fell to $0.53/pound.


Source: MetalMiner data from MetalMiner IndX(?). Note: Y-axis values represent $/lb.

The stainless steel surcharge has started a short-term downtrend, driven by the general price slowdown for steel and stainless steel markets. Stainless steel surcharges now appear to be moving toward 2015/2016 lows.

What This Means for Industrial Buyers

Stainless steel price momentum slowed down again this month, similar to carbon steel. Nickel prices also appear weaker, following slower momentum in commodities markets and in industrial metals markets. Buying organizations may want to follow the market closely for opportunities to buy on the dips.

Actual Stainless Steel Prices and Trends

Chinese 304 stainless steel coil decreased by 1.9%, while Chinese 316 stainless steel coil prices slid this month by 10.8%. Meanwhile, Chinese Ferrochrome prices fell by 3.9%, to $1,780/mt. Meanwhile, FerroMolybdenum lumps prices fell 13%, moving to $16,282/mt. Nickel prices also fell this month by 4.9% to $10,725/mt.

Steel Price Reductions in China Unnerve the Emerging Steel Markets

Commodity News?24/12/2018

The situation in the Brazilian steel market is virtually unchanged, from that reported in November. Business confidence is low. Domestic demand is weak, with few transactions being concluded. Traders are carrying stock that is surplus to current requirements ?C much of which was purchased at prices higher than those pertaining today. Meanwhile, local producers expect that the tough business conditions will spill over into, at least, the first quarter of 2019.

The business environment, in the Russian Federation, is slow. Distributors are allowing inventories to run down, in order to free working capital and minimize potential losses, as current demand reduces ahead of the eight-day New Year/Orthodox Christmas break. Construction demand is tepid, and is forecast to decrease with the onset of inhospitable winter weather conditions.

stainless steel sheet


The Indian trading climate is subdued. Steel usage is weak for seasonal reasons. Domestic steelmakers are considering a price rise in January, but buyers believe that their expectations are unrealistic. Local construction firms are reluctant to purchase more steel than they need to meet their near-term requirements. Third country flat product import offers are available, but buyers show little interest.

With winter approaching, Chinese steelmakers have started to redirect material to the country??s eastern and southern provinces, to counter the slowdown in the northern regions. Restocking is expected to pick up after the Lunar New Year holidays (from February 4 to 10), at the earliest, assuming no unforeseen procurement surge beforehand.

Purchasing activity is limited, in Ukraine. Stockists are reluctant to place new orders, at present, due to the onset of the winter trading period. Despite this, domestic steelmakers are keen to lift selling figures to protect margins, citing rising steelmaking raw material costs. The local association of metal producers, Metallurgprom, reported that finished steel production, in November 2018, totalled 1.47 million tonnes ?C down 3.3 percent, month-on-month.

In Turkey, business is slow in the steel market and local distributors?? margins are being squeezed. The majority of these firms plan to persevere with conservative inventory levels over the January-February trading period. Meanwhile, end-user groups plan to closely monitor the price premium charged by the local mills, relative to the cost of imports, before deciding where to buy. Export business opportunities are poor, at present.

Price volatility is undermining market sentiment, in the United Arab Emirates. Minimal trade was conducted during the period surveyed. Competition between service centres is fierce for the available business. End-users are still waiting for evidence of price stability.

The outlook for the South African steel market is unchanged. Service centres are keeping inventories steady and only buying for orders already on their books. Sales activity is sluggish to many steel consuming segments. The construction sector continues to operate with limited public and private finance.

Trading conditions in Mexico are quite slow. Service centres are delaying purchases until January to assess how demand develops. MEPS notes little appetite for buying steel, at present. Construction activity in the public sector is at a standstill, currently, as the market awaits government decisions on proposed new investments.
Source: MEPS

Namibian Partner Visits Vigor Dragon Group For A Cooperation

On July 22nd, as the invitation of Guangzhou Limpidness Environment (GZLE), which is one of the?subsidiary of Vigor Dragon Group , Ms. IMALWA KLEDURA NUUGWANGA, the head of our cooperation partner in Namibia, arrives in Guangzhou to start a seven-day trip on cooperation about the Sea Water Desalination and Power Stations.

From July 23rd?to 24th, Mr. Max Lu, the Chairman of GZLE, and Mr. Leo Qiu, Assistant to the Chairman, accompanies Ms. IMALWA KLEDURA NUUGWANGA to visit DONGFANG ELECTRIC CORPORATION (DEC) in Sichuan Province??overseas strategic partner of GZLE.

The head of DEC warmly welcomes the delegation from GZLE and presents the development history of DEC and its strength of power generation equipment manufacturing and scientific research achievements and lead to visit the equipment manufacturing bases. Namibian guest is deeply impressed by DEC??s power equipment production scale and desalination technology, and strongly hope to expand wider cooperation at an earlier date.

Through this field visit, Namibian partner has more closely and deeply understood GZLE, which further facilitates mutual trust and consolidates the foundation cooperation of both sides. After frank negotiation, the two sides agree highly on the development and promotion of infrastructure projects such as seawater desalination and power stations.

On July 25th, Mr. DAVID WANG, the General Manager of GZLE, officially signs a cooperation agreement with Ms. IMALWA KLEDURA NUUGWANGA, the director of the JRK Conquer investment cc. Both sides agree to jointly develop projects of desalination and power stations in Namibia.


American Screw Thread Steel Price Keep Stable and May Bear Pressure in Early 2019

On December 19, 2018 source: therefore nishimoto Shinkansen

It is learned that American screw thread steel price has kept stable at $710-720 per just ton.


Insiders say, 4# screw thread steel basic price is $710 per just ton, 5# is $690 per just ton, while 6# is $685 per just ton.

In despite of market supply surplus at the end of this year, it is possible for basic price to rise in the future several months.

One of the American Middle West market participants says, the price of steel scrap dropped off a little, but according to the present condition, I think domestic steel industries have been planning to raise price in the Q1 of next year since August their business did not perform well. Despite global other markets and imports price tend to be low, American steel industries will still try to raise price at the beginning of 2019.

Other latencies may make differences on the market In early 2019 including the factors as following, American repealing customs collection of Canada and Mexico steel, lowering customs of Turkey steel and price of steel scrap continuously.

The trade surplus

Things you will learn from carrying your own reusable straw

from Securities daily

On 8 December, China??s total volume of import and export trade in the first 11 months to November had surpassed that of last year, up 11.1% year on year to 27.88 trillion yuan. Besides, exports rose 8.2% to 14.92 trillion yuan while imports grew 14.6% to 12.96 trillion yuan; trade surplus narrowed 21.1% to 1.96 trillion yuan according to data from China Customs.

In November, China total volume of import and export value grew year on year 9.1% to 2.83 trillion yuan in RMB. Besides, exports increased 10.2% to 1.57 trillion yuan, prior to 20%; exports were up 7.8% to 1.26 trillion yuan, prior 25.7%; trade surplus expanded 21.5% to 306.04 billion yuan.

After import and export in October were better than expected, both of those in November fell down and showed lower than expected. Chen Jianheng, a date analyst of Zhongjin Gold Corp. Ltd. figured that exports shares and America domestic huge demand supported high prior export growth, but export growth would turn down gradually at last not only to America but also to the world because of a decline in external demand with an obvious drop-off order.

Macroeconomic researcher Sun Fu talked to a reporter from Securities Daily that the exports growth in November fell sharply mainly owing to the relatively large cardinal number year on year. November singular exports sum in 2015/ 2016 was 195 billion dollars or so, and that in 2017 increased greatly to 217.4 billion dollars driven by external demand towards good, 10% higher than the corresponding period, but the exports pressure of Q4 was obviously higher than the first 3 quarters this year. Slow external demand is the main influence factor that export growth slew down while high cardinal number gave rise to fluctuation between months.

Referring the downturn of imports data in November, Chen Jianheng said the sharp drop-off in imports was out of expectation, it is relevant to two aspects, on one hand, International oil price and a large quantity of commodity price fell down since October, which caused import price slew down more quickly, on the other hand, the collapse in price of domestic industrial products in November made import of raw materials become more cautious.

Sun Fu figured that the high cardinal number also affects the sharp decline in import growth last year, on another aspect, domestic demand keeping slow is an important factor. One is imported growth of agricultural, mechanical and electric, new high-tech products turned negative in November from the respective of main import commodities; the other is the import growth of all countries slew down except Australia from the respective of main import countries.

Regarding foreign trade of next year, Chen Jianheng said, it would be hard for China trade surplus to obvious expansion next year, but in the situation that RMB exchange rate did not devalue, the deficit of service would tend to widen. China current account surplus may narrow next year, which meant that it would be tougher for China to gain profit from overseas continually. Thus, if exchange devalues could not achieve stimulation of exportation, boosting economy could only rely on domestic demand and reducing the domestic interest rate, at the same time supporting our economy by increasing financial deficit and financial expenditure. As a result, the domestic interest rate would continue to be a downtrend.