China: Stainless steel output, trade show strong growth in H1CY'24

Mysteel Global: In the first half of 2024, China's stainless steel crude steel production reached 18.75 million tonnes (mnt), marking a 5.88% increase of 1.04 mnt compared to the same period last year.

Series-wise breakdown

300 series: Production totaled 9.40 mnt, up by 797,600 t or 9.27% y-o-y. This category now accounts for 50.15% of total production, representing a 1.56% increase from the previous year.

200 series: Production was 5.61 mnt, an increase of 32,600 t or 0.58%. This type makes up 29.94% of the total production, down by 1.58% from the previous year.

400 series: Production reached 3.53 mnt, up by 207,300 t or 6.24%, and holds an 18.83% share of the total, with a slight increase of 0.06%.

Duplex: In the first half of the year, China produced 202,948 t of high-end duplex stainless steel, marking a 1.9% increase of 3,824 t from the previous year. This accounted for 1.9% of the nation's total stainless steel output, according to the association.

Import, export scenario

According to Chinese customs data, China imported nearly 1.11 mnt of stainless steel in the first half of this year, marking a 31.43% increase from the previous year. June saw imports of about 131,000 t, which was an 11% y-o-y rise but a 25% m-o-m decline.

During the same period, China's stainless steel exports reached 2.36 mnt, up nearly 16% from the previous year. June's exports were approximately 453,000 t, reflecting a 32% y-o-y increase but a 1% m-o-m decrease. Consequently, China's net stainless steel exports for the first half of the year were 1.26 mnt, up 5% from the previous year.

Apparent Consumption of Stainless Steel (January-June 2024)

In the first half of 2024, apparent consumption of stainless steel in China was 15.69 mnt. This represents a y-o-y increase of 5.82%, or 862,200 t.

Overall, the report indicates robust growth in stainless steel production and consumption, with a notable increase in both imports and exports. Despite the production growth, China's domestic stainless steel market remained under pressure in the first half of the year. Local demand from end-users was weak, and stainless steel inventories at traders' warehouses remained relatively high.

Raw material scenario

Nickel: In the first half of 2024, China's primary nickel supply reached 1.12 mnt, up 11% y-o-y, with output increasing by 6.3% to 485,200 t and imports rising by 14.6% to 640,300 t. Nickel pig iron production dropped by 14% due to reduced domestic output and high raw material costs. Conversely, nickel metal production surged 22%, driven by new capacities from Huayou, Tsingshan, and Xinxin. Imports of nickel pig iron rose 29%, while those of ferronickel and metallic nickel decreased. The stainless steel sector saw excess capacity and inventory buildup, with a slight increase in production but shrinking profits.

Ferro molybdenum: In the first half of 2024, China's domestic molybdenum market experienced significant volatility. Initially, the market had a relatively balanced supply and demand, but it shifted to a state of strong supply and weak demand, leading to fluctuating prices. The first quarter saw an upward trend in molybdenum prices. However, by the end of the first quarter and the start of the second quarter, demand was lower than anticipated, and stainless steel inventories grew due to high production. This mismatch caused molybdenum prices to hit a new low before rebounding, resulting in a volatile market environment for the rest of the period.

Ferro chrome: In H1 2024, China's high carbon ferro chrome market showed mixed trends. Q1 was characterized by stable purchase prices and a lackluster market, with minimal transaction volume and cautious buyers. Tsingshan Group's April price increase briefly boosted the market, but subsequent declines in stainless steel prices and slow procurement led to minor corrections. Q2 experienced initial declines in tender prices and rising production drove pessimism and price drops, but a rise in external chrome ore prices from May improved the market. Despite a significant production increase to 4.38 mnt (up 28.15% y-o-y), high chrome ore prices and production cuts caused slight nationwide declines. Demand for high carbon ferrochrome reached 3.46 mnt, with imports up 11.33%, primarily from Kazakhstan and Zimbabwe.

Outlook

Looking ahead the stainless steel market in China is expected to see moderated growth in H2 2024. While production and export activity remain strong, domestic demand pressures and raw material cost volatility will influence market stability.

Note: This article has been written in accordance with an agreement between Mysteel and BigMint.