Global stainless steel and raw material market outlook
Global stainless steel and raw material market outlook for 2021 and the future
On April 21, 2021, Mr. Markus Moll, Managing Director of SMR Steel and Metals Market Research Company (SMR GmbH) in Austria, made a speech entitled "2021 and the Future Global Stainless Steel Industry Chain" at the "Chunhui" 2021 (3rd) Stainless Steel Industry Chain Summit. And raw material market outlook" keynote speech.
1. The status quo of the world's stainless steel industry
In 2020, the global output of stainless steel crude steel is 53.13 million tons, and the output of steel is 45.25 million tons. According to the shape of the product, it is divided into plates and long products. Among them, stainless steel plate products are about 38 million tons (accounting for 84%), and long products are about 7 million tons (accounting for 16%). According to product characteristics, it can be divided into three categories: conventional products, value-added products and high value-added products. Among them, customers choose suppliers based on the price of bulk commodities. For value-added products, customers usually need to pay higher prices to local suppliers. Since the number of suppliers for high value-added products is limited, the pricing power is in the hands of the suppliers. The production systems of conventional products, value-added products and high value-added products are completely different, just like horse racing and vaulting in equestrian competitions. The company is positioned to produce the kind of goods, and the production technology, raw material composition, smelting, casting, hot rolling, cold rolling, finishing rolling and marketing are all different. The scale of China's stainless steel production also determines that it is impossible to focus solely on value-added products, and must strive to succeed in conventional products.
From the market statistics of 95% of the consumption scale, the consumption scale of all markets except China will be declining in 2020. China's stainless steel consumption in 2020 will be 24 million tons. From the perspective of consumption scale, China stands alone, much higher than major consumer markets such as Europe, India, and the United States. The consumption scale of these markets is less than 8 million tons. Another important change factor is the proportion of 300 series stainless steel. From 2012 to 2016, the proportion of 300 series stainless steel showed a downward trend year by year. As previously predicted, with the gradual decrease of 200 series as an alternative to 300 series, the proportion of 300 series increased year by year after 2016. As the world's two major 200-series stainless steel producers, China and India, the proportion of the 200-series has declined, and the proportion of the 300-series has increased. This trend will continue. This is good news for nickel producers. All 300 series products contain higher nickel content, 200 series nickel content is lower, and 400 series contains almost no nickel.
Judging from the actual demand data in 2020, the total demand for long products is 6.1 million tons and the demand for plates is 37 million tons. The product composition of long products and plates is quite different. For example, in long products, molybdenum-containing 300 series stainless steel accounts for 11%, while in plates it is only 9%. The proportion of duplex steel in long products is higher than that in plates. And the proportion of 400 series (ferrite) in the plate is 23% higher than the proportion of 400 series (martensite) in the long product of 18%.
2. Overview of global stainless steel production
Fifteen of the top 20 stainless steel sheet manufacturers in global production are Asian stainless steel manufacturers. Qingshan's plate output is 8.5 million tons, ranking first in the world, followed by Taigang, Beigang New Materials, Pohang, Outokumpu and Baosteel Desheng. With Baowu's reorganization of TISCO, the output gap between Baowu TISCO and Qingshan will narrow in the future. Judging from the current plans issued by companies, the growth of Chinese stainless steel companies is the most obvious. Only a few European companies and Jindal have plans to increase production. Jindal plans to add 1 million tons of smelting capacity in Odisha. Except for China, Indonesia and India, there are almost no plans for new stainless steel production capacity in other countries and regions.
From the perspective of conversion profit (selling price-raw material cost), due to the impact of trade protection policies, the conversion profit per ton of steel for European and American steel mills is higher than US$1,000, while the conversion profit of Chinese steel mills is only US$500 per ton. In March, the conversion profit per ton of steel of Chinese steel mills is decreasing, while the profit of conversion per ton of steel of European and American steel mills is increasing, setting a high monthly profit in the past two years.
In the past 20 years, the share of China and Indonesia in the global market has undergone tremendous changes. From a negligible share in 2000 to 41% in 2010, China and Indonesia now account for 65% of global production. It is expected that in the near future In the future, this proportion may reach up to 70% and stabilize.
From the perspective of global trade data, the amount of stainless steel exported from China to Asian countries is about 1.5 million tons, and the data for other countries and regions exported is 645,000 tons. The proportion of intercontinental trade circulation in the global stainless steel market has dropped from 20% two years ago to 14%, reflecting the impact of global trade protectionism and the decline in the globalization of stainless steel.
3. The use of scrap steel will be very important in the future
There are four main types of steel scrap sources. The return material from steel mills, which accounts for 11% of crude steel output, takes about 3 months. The primary steel scrap (scrap produced during product processing) takes about 6 months to be recycled to the steel mill. Old scrap steel is recycled in stainless steel equipment after an average service cycle of about 27 years. The fourth type is mixed steel scrap, which is mixed with different components to meet the raw material needs of production. Most European and American stainless steel plants use mixed scrap.
From 2016 to 2020, the use ratio of scrap steel in different regions of the world shows that in 2020, the use ratio of scrap steel worldwide is 53.1%, while the use ratio of scrap steel in the United States is the highest, and the proportion of scrap steel use in some European steel plants is as high as 80%, or even 90%. Since many of the main steelmaking equipment in India are intermediate frequency furnaces, the proportion of scrap steel used is also high, and the scrap use ratio of intermediate frequency furnace enterprises is as high as 95%. Due to the current economic efficiency of imported scrap steel and other reasons, China's scrap use ratio is only 20-25%. Whether this situation will change in the future deserves global attention. With the increase in stainless steel production in Indonesia, the use ratio of stainless steel scrap in Asia has declined.
With the global emphasis on environmental protection, reducing carbon emissions has become the focus of global attention. Carbon steel accounts for 7% of global carbon emissions. Carbon emissions per ton of steel are 1.83 tons, while the average carbon emissions per ton of stainless steel is 2.9 tons. From the perspective of the stainless steel production process, the entire process in China and Indonesia (the use ratio of scrap steel is 10%). ) Carbon emissions per ton of steel are 4.3 tons, while the carbon emissions of short processes (80% of scrap steel use) in Europe, Japan, and the United States have dropped to 1.1 tons. In the long run, the long-term smelting process is unsustainable for reducing carbon emissions. Therefore, an effective way to reduce carbon emissions in the carbon steel and stainless steel industries is to increase the proportion of scrap steel used. However, the current global accumulation of scrap steel is not enough. From the perspective of the proportion of raw materials in 2020, the use ratio of scrap steel is 41%. Increasing the ratio of scrap steel becomes the direction of future efforts.
One of the important ways to reduce carbon emissions in the stainless steel industry is to increase the use ratio of scrap steel. In the process of scrap steel recycling, it is necessary to improve the quality of scrap steel recycling. In addition, improving the recycling rate of scrap steel is also an important way. Efforts need to be made to increase the recycling rate of scrap steel from the current 75% to 80% or even higher. The second is to use "green" iron alloy raw materials, and use hydrogen instead of coke as a reducing agent in the production of ferrochrome, ferromolybdenum, and ferronickel. The third way is to use green energy such as wind power. The price of carbon emissions trading will increase in the future, and it is expected that the price of carbon emissions trading will reach 100 US dollars in the next ten years. At the same time, the border adjustment mechanism to prevent carbon emissions is also very important. It is estimated that the carbon emissions per ton of stainless steel will be reduced to 1.9 tons in 2030, which will ensure the sustainable development of stainless steel.
The development of hydrogen energy will bring a lot of opportunities to stainless steel. Stainless steel will be used extensively in the industrial chain of hydrogen production, distribution, storage and terminal applications. Enough to offset the reduction in the consumption of stainless steel in automobile exhaust systems.
From the perspective of the global stainless steel consumption structure in 2020. The amount of stainless steel used in petrochemicals and energy sources will increase globally, while the automotive industry performs poorly. The housing construction industry will be one of the main driving forces for the future growth of stainless steel. Although the growth rate of electrical appliances, consumer goods, and catering industries is not as fast as that of housing construction Industry, but it will also enable us to grow steadily in the stainless steel industry.
On April 21, 2021, Mr. Markus Moll, Managing Director of SMR Steel and Metals Market Research Company (SMR GmbH) in Austria, made a speech entitled "2021 and the Future Global Stainless Steel Industry Chain" at the "Chunhui" 2021 (3rd) Stainless Steel Industry Chain Summit. And raw material market outlook" keynote speech.
1. The status quo of the world's stainless steel industry
In 2020, the global output of stainless steel crude steel is 53.13 million tons, and the output of steel is 45.25 million tons. According to the shape of the product, it is divided into plates and long products. Among them, stainless steel plate products are about 38 million tons (accounting for 84%), and long products are about 7 million tons (accounting for 16%). According to product characteristics, it can be divided into three categories: conventional products, value-added products and high value-added products. Among them, customers choose suppliers based on the price of bulk commodities. For value-added products, customers usually need to pay higher prices to local suppliers. Since the number of suppliers for high value-added products is limited, the pricing power is in the hands of the suppliers. The production systems of conventional products, value-added products and high value-added products are completely different, just like horse racing and vaulting in equestrian competitions. The company is positioned to produce the kind of goods, and the production technology, raw material composition, smelting, casting, hot rolling, cold rolling, finishing rolling and marketing are all different. The scale of China's stainless steel production also determines that it is impossible to focus solely on value-added products, and must strive to succeed in conventional products.
From the market statistics of 95% of the consumption scale, the consumption scale of all markets except China will be declining in 2020. China's stainless steel consumption in 2020 will be 24 million tons. From the perspective of consumption scale, China stands alone, much higher than major consumer markets such as Europe, India, and the United States. The consumption scale of these markets is less than 8 million tons. Another important change factor is the proportion of 300 series stainless steel. From 2012 to 2016, the proportion of 300 series stainless steel showed a downward trend year by year. As previously predicted, with the gradual decrease of 200 series as an alternative to 300 series, the proportion of 300 series increased year by year after 2016. As the world's two major 200-series stainless steel producers, China and India, the proportion of the 200-series has declined, and the proportion of the 300-series has increased. This trend will continue. This is good news for nickel producers. All 300 series products contain higher nickel content, 200 series nickel content is lower, and 400 series contains almost no nickel.
Judging from the actual demand data in 2020, the total demand for long products is 6.1 million tons and the demand for plates is 37 million tons. The product composition of long products and plates is quite different. For example, in long products, molybdenum-containing 300 series stainless steel accounts for 11%, while in plates it is only 9%. The proportion of duplex steel in long products is higher than that in plates. And the proportion of 400 series (ferrite) in the plate is 23% higher than the proportion of 400 series (martensite) in the long product of 18%.
2. Overview of global stainless steel production
Fifteen of the top 20 stainless steel sheet manufacturers in global production are Asian stainless steel manufacturers. Qingshan's plate output is 8.5 million tons, ranking first in the world, followed by Taigang, Beigang New Materials, Pohang, Outokumpu and Baosteel Desheng. With Baowu's reorganization of TISCO, the output gap between Baowu TISCO and Qingshan will narrow in the future. Judging from the current plans issued by companies, the growth of Chinese stainless steel companies is the most obvious. Only a few European companies and Jindal have plans to increase production. Jindal plans to add 1 million tons of smelting capacity in Odisha. Except for China, Indonesia and India, there are almost no plans for new stainless steel production capacity in other countries and regions.
From the perspective of conversion profit (selling price-raw material cost), due to the impact of trade protection policies, the conversion profit per ton of steel for European and American steel mills is higher than US$1,000, while the conversion profit of Chinese steel mills is only US$500 per ton. In March, the conversion profit per ton of steel of Chinese steel mills is decreasing, while the profit of conversion per ton of steel of European and American steel mills is increasing, setting a high monthly profit in the past two years.
In the past 20 years, the share of China and Indonesia in the global market has undergone tremendous changes. From a negligible share in 2000 to 41% in 2010, China and Indonesia now account for 65% of global production. It is expected that in the near future In the future, this proportion may reach up to 70% and stabilize.
From the perspective of global trade data, the amount of stainless steel exported from China to Asian countries is about 1.5 million tons, and the data for other countries and regions exported is 645,000 tons. The proportion of intercontinental trade circulation in the global stainless steel market has dropped from 20% two years ago to 14%, reflecting the impact of global trade protectionism and the decline in the globalization of stainless steel.
3. The use of scrap steel will be very important in the future
There are four main types of steel scrap sources. The return material from steel mills, which accounts for 11% of crude steel output, takes about 3 months. The primary steel scrap (scrap produced during product processing) takes about 6 months to be recycled to the steel mill. Old scrap steel is recycled in stainless steel equipment after an average service cycle of about 27 years. The fourth type is mixed steel scrap, which is mixed with different components to meet the raw material needs of production. Most European and American stainless steel plants use mixed scrap.
From 2016 to 2020, the use ratio of scrap steel in different regions of the world shows that in 2020, the use ratio of scrap steel worldwide is 53.1%, while the use ratio of scrap steel in the United States is the highest, and the proportion of scrap steel use in some European steel plants is as high as 80%, or even 90%. Since many of the main steelmaking equipment in India are intermediate frequency furnaces, the proportion of scrap steel used is also high, and the scrap use ratio of intermediate frequency furnace enterprises is as high as 95%. Due to the current economic efficiency of imported scrap steel and other reasons, China's scrap use ratio is only 20-25%. Whether this situation will change in the future deserves global attention. With the increase in stainless steel production in Indonesia, the use ratio of stainless steel scrap in Asia has declined.
With the global emphasis on environmental protection, reducing carbon emissions has become the focus of global attention. Carbon steel accounts for 7% of global carbon emissions. Carbon emissions per ton of steel are 1.83 tons, while the average carbon emissions per ton of stainless steel is 2.9 tons. From the perspective of the stainless steel production process, the entire process in China and Indonesia (the use ratio of scrap steel is 10%). ) Carbon emissions per ton of steel are 4.3 tons, while the carbon emissions of short processes (80% of scrap steel use) in Europe, Japan, and the United States have dropped to 1.1 tons. In the long run, the long-term smelting process is unsustainable for reducing carbon emissions. Therefore, an effective way to reduce carbon emissions in the carbon steel and stainless steel industries is to increase the proportion of scrap steel used. However, the current global accumulation of scrap steel is not enough. From the perspective of the proportion of raw materials in 2020, the use ratio of scrap steel is 41%. Increasing the ratio of scrap steel becomes the direction of future efforts.
One of the important ways to reduce carbon emissions in the stainless steel industry is to increase the use ratio of scrap steel. In the process of scrap steel recycling, it is necessary to improve the quality of scrap steel recycling. In addition, improving the recycling rate of scrap steel is also an important way. Efforts need to be made to increase the recycling rate of scrap steel from the current 75% to 80% or even higher. The second is to use "green" iron alloy raw materials, and use hydrogen instead of coke as a reducing agent in the production of ferrochrome, ferromolybdenum, and ferronickel. The third way is to use green energy such as wind power. The price of carbon emissions trading will increase in the future, and it is expected that the price of carbon emissions trading will reach 100 US dollars in the next ten years. At the same time, the border adjustment mechanism to prevent carbon emissions is also very important. It is estimated that the carbon emissions per ton of stainless steel will be reduced to 1.9 tons in 2030, which will ensure the sustainable development of stainless steel.
The development of hydrogen energy will bring a lot of opportunities to stainless steel. Stainless steel will be used extensively in the industrial chain of hydrogen production, distribution, storage and terminal applications. Enough to offset the reduction in the consumption of stainless steel in automobile exhaust systems.
From the perspective of the global stainless steel consumption structure in 2020. The amount of stainless steel used in petrochemicals and energy sources will increase globally, while the automotive industry performs poorly. The housing construction industry will be one of the main driving forces for the future growth of stainless steel. Although the growth rate of electrical appliances, consumer goods, and catering industries is not as fast as that of housing construction Industry, but it will also enable us to grow steadily in the stainless steel industry.
