Global stainless steel and raw material market outlook in 2021 and the future
Current situation of world stainless steel industry
In 2020, the global crude stainless steel output will be 53.13 million tons, and the steel output will be 45.25 million tons. According to the shape of products, it can be divided into plate and long material. Among them, stainless steel plate products are about 38 million tons (accounting for 84%), and long material products are about 7 million tons (accounting for 16%). According to the characteristics of products, it can be divided into three categories: conventional products, value-added products and high value-added products. Among them, customers choose suppliers according to the price of bulk commodities. For value-added products, customers usually have to pay higher prices to local suppliers. Due to the limited number of suppliers, the pricing power of high value-added products is in the hands of suppliers. The production systems of conventional products, value-added products and high value-added products are completely different, just like horse racing and horse vaulting in equestrian competitions. The production technology, raw material composition, smelting, casting, hot rolling, cold rolling, finishing rolling and marketing are different. The production scale of stainless steel in China also determines that it is impossible to only locate in value-added products, but must strive to achieve success in conventional products.
According to the market statistics of 95% consumption scale, the consumption scale of all markets except China will be declining in 2020. In 2020, China’s stainless steel consumption will be 24 million tons. In terms of consumption scale, China stands out, far higher than other 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. Just as previously predicted, with the gradual decrease of 200 series as a substitute product of 300 series, the proportion of 300 series stainless steel increased year by year after 2016. As the two major producers of 200 series stainless steel in the world, China and India, the proportion of 200 series stainless steel decreased, while the proportion of 300 series stainless steel increased. This trend will continue. This is good news for nickel producers. All 300 series products contain high nickel content, 200 series products contain low nickel content, and 400 series products contain almost no nickel.
From the actual demand data in 2020, the total demand for long timber is 6.1 million tons, and the demand for plate is 37 million tons. The product composition of long timber and plate is quite different. For example, in the long material, the proportion of 300 series stainless steel containing molybdenum reaches 11%, while in the plate, it is only 9%. The proportion of dual phase steel in long steel is higher than that in plate. The proportion of 400 series (ferrite) in the plate is 23%, which is higher than that of 400 series (martensite) in the long material 18%.
Overview of global stainless steel production
Among the top 20 stainless steel plate manufacturers in the world, 15 are Asian stainless steel manufacturers. The output of Qingshan plate is 8.5 million tons, ranking the first in the world. After that, Taigang, Beigang Xincai, POSCO, otokunpu, Baosteel Desheng. With the restructuring of Baosteel, the output gap between Baosteel and Qingshan will narrow in the future. According to the current plans released by enterprises, the growth of Chinese stainless steel enterprises is the most obvious. Only a few European enterprises and Jindal have plans to increase production. Jindal plans to add 1 million tons of smelting capacity in Orissa. 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), influenced by the trade protection policy, the conversion profit per ton of steel in Europe and the United States is more than US $1000, while the conversion profit per ton of steel in China is only US $500. In March, the profit per ton of steel conversion of Chinese steel mills is decreasing, while that of European and American steel mills is increasing, reaching the highest monthly profit in recent 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 the total global output. It is expected that this proportion may reach as high as 70% in the near future and stabilize.
According to the global trade data, China exported about 1.5 million tons of stainless steel to Asian countries and 645000 tons to other countries and regions. The proportion of intercontinental trade circulation in the global stainless steel market has dropped from 20% two years ago to 14%, reflecting the declining trend of stainless steel globalization under the influence of Global trade protectionism.
The use of scrap will be very important in the future
From the perspective of scrap sources, there are mainly four kinds of scrap. The recycling time of steel plant return material, which accounts for 11% of crude steel output, is about 3 months. The first scrap (scrap produced in the process of product processing) can be recycled to the steel plant in about 6 months. The old scrap is recycled after an average service period of about 27 years in stainless steel equipment. The fourth kind is mixed scrap, The raw material needs of production can be met by mixing scrap with different components. Most stainless steel plants in Europe and America use mixed scrap.
From the data of scrap utilization ratio in different regions of the world from 2016 to 2020, the global scrap utilization ratio is 53.1% in 2020, while the proportion of scrap utilization in the United States is the highest, and the proportion of scrap utilization in some European steel plants is as high as 80%, or even 90%. In India, because most of the main steelmaking equipment is medium frequency furnace, the proportion of scrap is also high, and the proportion of scrap used by medium frequency furnace enterprises is as high as 95%. Due to the current economic import of scrap and other reasons, China’s scrap utilization ratio is only 20-25%. Whether this situation will change in the future deserves global attention. With the increase of stainless steel production in Indonesia, the utilization ratio of stainless steel scrap in Asia decreased.
With the global attention to environmental protection, reducing carbon emissions has become the focus of global attention. Carbon steel accounts for 7% of the total global carbon emission, and the carbon emission per ton of steel is 1.83 tons, while the average carbon emission per ton of stainless steel is 2.9 tons. From the perspective of stainless steel production process, the carbon emission per ton of steel in China and Indonesia is 4.3 tons, while that in Europe, Japan and the United States is 1.1 tons. In the long run, the long process smelting process is not sustainable for reducing carbon emissions, so the effective way to reduce carbon emissions of carbon steel and stainless steel industry is to increase the proportion of scrap. However, the current global scrap accumulation is not enough. According to the proportion of raw materials in 2020, the proportion of scrap steel is 41%, and increasing the proportion of scrap steel will become the direction of future efforts.
One of the important ways to reduce carbon emission of stainless steel industry is to increase scrap utilization ratio. In the process of scrap recovery, it is necessary to improve the quality of scrap recovery. In addition, it is also an important way to improve the scrap recovery rate. Efforts should be made to increase the scrap recovery rate from the current 75% to 80%, or even higher. The second is to use “green” ferroalloy raw materials and hydrogen instead of coke as reducing agent in the production of ferrochrome, ferromolybdenum and ferronickel. The third way is to use green energy such as wind power. In the future, the price of carbon emissions trading will increase, and it is expected that the price of carbon emissions trading will reach as high as $100 in the next decade. At the same time, the border adjustment mechanism to prevent carbon emissions is also very important. It is estimated that the carbon emission per ton of stainless steel will be reduced to 1.9 tons in 2030, which can 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 widely used in hydrogen production, distribution, storage and terminal application. Enough to offset the reduction of stainless steel consumption in automobile exhaust system.
From the global consumption structure of stainless steel in 2020. The consumption of stainless steel in petrochemicals and energy will increase globally, while the automobile industry will not perform well. 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 industry is lower than that of housing construction industry, it will also make us grow steadily in the stainless steel industry.
Source: China Pipe Flange Manufacturer – Yaang Pipe Industry Co., Limited (www.pipelinedubai.com)
(Yaang Pipe Industry is a leading manufacturer and supplier of nickel alloy and stainless steel products, including Super Duplex Stainless Steel Flanges, Stainless Steel Flanges, Stainless Steel Pipe Fittings, Stainless Steel Pipe. Yaang products are widely used in Shipbuilding, Nuclear power, Marine engineering, Petroleum, Chemical, Mining, Sewage treatment, Natural gas and Pressure vessels and other industries.)
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