The profit recovery potential for the 316L stainless steel coil production is limited.
This week, the domestic blast furnace operation rate has once again shown a downward trend. The main reason for this is that the current market for Stainless Steel Coil 316L is in a sluggish season, and the profit margins of some Stainless Steel Coil 316L factories have been squeezed. To alleviate supply pressure and control production costs, some of these factories have actively scheduled furnace maintenance. As a result, the total capacity for maintenance this week has increased compared to the previous period.
However, based on the current overall production rate, it is still at a relatively high level compared to the same period in previous years. Although there have been rumors of concentrated maintenance in some regions recently, in light of the actual situation, the scale of maintenance is relatively limited. Most large-capacity blast furnaces have not entered the maintenance sequence. Therefore, the reduction in iron water supply is not significant, and it is difficult to fundamentally alleviate the supply pressure in the current Stainless Steel Coil 316L market. It is expected that the domestic blast furnace production levels will still fluctuate around the current level in the future.
In terms of supply, the global shipment volume has continued to operate at a high level. The shipment volumes of major mines in Australia and Brazil have reached relatively high levels compared to the same period. The abundant supply from distant regions is clear, which has continuously suppressed the price of Stainless Steel Coil 316L. In terms of demand, the second round of price hikes for coke have led to a decrease in the factory input costs of Stainless Steel Coil 316L; however, due to the influence of the industry's off-season, the apparent consumption of Stainless Steel Coil 316L has been weak, the social inventory of building materials has increased from a decrease, and the pressure to reduce inventory has risen. The repair space for the factory profits of Stainless Steel Coil 316L is limited, and the expectation of production cuts is constantly emerging, which has put pressure on the demand for raw material purchases. In summary, the supply of iron ore is clearly abundant, and combined with the continuous weakening of demand during the off-season, it is expected that the market of Stainless Steel Coil 316L will mainly remain in a state of oscillation and bottoming out in the short term.
