The production cuts in the market for N08904 stainless steel pipes and policy reductions have increased the pressure to reduce production.
Today's N08904 stainless steel pipe market spot prices are relatively volatile. Overall, the market is stabilizing, with a few markets actively raising prices, leading to a slight increase in the overall average price of stainless steel pipes. The market for N08904 stainless steel pipes has moderate trading, with no significant improvement compared to yesterday, indicating a lack of market confidence.
Today's release of April economic data shows that the supply data related to N08904 stainless steel pipes is still relatively high. Since May, production cuts and policy reductions in the N08904 stainless steel pipe market have increased the pressure for production cuts. However, due to the rapid decline in raw materials such as coke and coking coal, steel mills are wavering between profit and loss, and the motivation for production cuts remains insufficient. If the situation weakens in May, there may be a certain decline in crude steel production compared to April. However, to address the current demand situation for N08904 stainless steel pipes, it is still necessary to see a better improvement in the supply-demand relationship.
From the demand side, the growth rates of the three major investment areas, namely real estate investment, infrastructure investment, and manufacturing investment, have all shown a decline, indicating insufficient demand driving for N08904 stainless steel pipes. The data for new construction area and construction area in the real estate sector are still weak, while the completed area and transaction area have performed relatively well. This divergence in the real estate sector also reflects the financial pressure on enterprises, as the funds from property sales have not been effectively transferred to land acquisition and new construction. In the infrastructure field, the decline in railway and road investment has weakened the driving force of old infrastructure, resulting in an overall decline in infrastructure investment. However, in the field of infrastructure, the largest segment using steel is still railways and rail transportation. Nevertheless, electric heating and transportation have become the major drivers of infrastructure investment in April, which still exert certain pulling force on N08904 stainless steel pipes.
The economic data for this month, combined with the previously announced social financing data, reflects the insufficient momentum for the current economic recovery. Since the severe outbreak of the pandemic in the second quarter of last year, many data points have been affected by a low base, but if this window period cannot stabilize market confidence, it will intensify concerns about the macroeconomy as multiple indicators continue to decline. However, fortunately, we can see that the recovery of demand lags behind financial data and some sub-indicators are performing well. This indicates that the market should expect a strong return to weak reality and a slow recovery of demand, requiring patience to wait for the bottoming process.
Outlook for the N08904 stainless steel pipe market:
From the current perspective, the impact of today's economic data on the market is limited. The adjustment in futures prices did not translate into significant adjustments in spot prices. With some steel mills holding prices and market expectations of price increases, N08904 stainless steel pipes still show resistance to price declines in the spot market. However, the trend has not changed, and the contradictions have not been resolved. The dividends released by the end of the epidemic have been largely exhausted. In the next stage, real growth momentum is needed. This requires the market to focus on industrial profits, price-value relationships, and adjustments in supply and demand. It is also important to watch for opportunities driven by policy changes in macroeconomic trends, including the necessity of monetary policy support for the recovery of real economy demand. In the upstream sector, particular attention should be paid to issues such as short-term production stoppages in areas like Shaanxi for coking coal and transportation problems for Mongolian coal. The smooth decline in raw material prices narrows the cost reduction space for N08904 stainless steel pipes.
In the short term, the N08904 stainless steel pipe market is expected to experience mainly fluctuations in the spot market. There may still be opportunities for some local markets to rebound, although the magnitude of the rebound will be limited. The market needs to closely monitor factors such as industrial profits, price-value dynamics, and supply-demand adjustments. Additionally, it is crucial to observe the potential for policy-driven macroeconomic shifts and the necessity of monetary policy support for the recovery of real economy demand.
In the upstream sector, it is important to pay attention to short-term production stoppages of coking coal in regions like Shaanxi and transportation issues for Mongolian coal. These factors can impact the smooth decline in raw material prices and potentially limit the cost reduction space for N08904 stainless steel pipes.
Overall, the current economic data, including the recently released social financing data, indicates that the momentum of economic recovery remains insufficient. While the recovery of demand may have a lag, there are positive performances observed in some sub-indicators. Therefore, the market for N08904 stainless steel pipes should anticipate a return to weaker reality and a slow recovery of demand, requiring patience during the bottoming process.
