Why the HR stainless steel price rise more heavily than CR last week

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Why the HR stainless steel price rise more heavily than CR last week

Last week,  both of the hot rolled  and cold rolled stainless steel price rise continues their trends after a long time of rise up. But the trends start to polarize. That’s HR rise more heavily than CR.

 

Please check below several sets of figures:

304/2B  stainless steel price rise:

Wuxi Market: The price of 2.0*1219*C cut edge is RMB 15100/Ton, rise up RMB 80/Ton and 0.53%.

Foshan Market: The price of 2.0*1219*C cut edge is RMB 15400/Ton, rise up RMB 80/Ton and 0.52%

 

304/No.1 stainless steel price rise:

Wuxi Market: The price of 4.0*1520*C is RMB 14010/Ton, rise up RMB 150/Ton and 1.08%

Foshan Market: The price of 4.0*1520*C is RMB 13720/Ton, rise up RMB 180/Ton and up 1.33%.

 

316L/2B:

Wuxi Market: The price of 2.0*1219*C is RMB 19080/Ton, rise up RMB 80/Ton and 0.42%

Foshan Market: The price of 2.0*1219*C is RMB 19220/Ton, rise up RMB 60/Ton and 0.31%

 

316/No.1 stainless steel price rise :

Wuxi Market: The price of 4.0*1500*C gross edge is RMB 18480/Ton, rise RMB 260/Ton and 1.43%

Foshan Market: The price of 4.0*1500*C gross edge is RMB 18380/Ton, rise RMB 260/Ton and 1,43%.

 

201/2B:

Wuxi Market: The price of 1.0*1219*C gross edge is RMB 8900/Ton, rise RMB 70/Ton and 0.79%.

Foshan Market: The price of 1.0*1219*C gross edge is RMB 8910/Ton, rise RMB 50/Ton and 0.56%

 

430/2B:

Wuxi Market: The price of 2.0*1219*C cut edge is RMB 8700/Ton, rise RMB 60/Ton and 0.69%

Foshan Market: The price of 2.0*1219*C cut edge is RMB 8600/Ton, rise RMB 160/Ton and 1.90%

 

After read them, you can find the stainless steel  price rise of HR is more heavily than cold rolled stainless steel products, why?

 

Below are several reasons for the phenomenon.

1. The supply of HR stainless steel centralized.

Due to the supply of HR stainless steel is centralized, so the steel mills’s discourse power is more powerful. As long as some steel mill slow its delivery, then the market will be in short of goods, so the price rise heavily. On the other hands, cold rolled stainless steel will not be in the same situation because of there are a lot of steel plants producing the products. If one plant reduce its production, then it will be replaced by other suppliers.

2.The disbributors of HR stainless steel is more centralized

For the HR stainless steel product, the First-Level distributor and the triple-level distributor are more powerful than the secondary-level distributor. For the first-level distributor, the sales volume are often more than 10,000 ton every month. Then the secondary-level distributors is very fewer. But the the triple-level distributors are also in lot of quantity. So the first-level agents have more discourse power.

But for the cold rolled stainless steel products, the distribution channel is more decentralized. Every steel plant has its core agent. So the second-level agents are more powerful than the first-level and triple-level distributors.

3.The procurement of HR stainless steel is more centralized than cold rolled.

For the HR stainless steel products, there is nearly 70,000 tons of HR steel plate will sold in Wuxi market, because the industries near Wuxi are more mainly the  industrial manufacturing. While the Foshan Market is mainly for the cold rolled because the industries around there are more civil manufacturing.

So the procurement of HR is more centralized in the industrial clients. If one HR stainless steel supplier mark down the price, then the buyers will lead to him without any publicity. But when the time is in short of supply, nobody will reduce the price, because other supplier will buy their stock to supplement their stock.

4.The supply of HR stainless steel can’t meet the needs while cold rolled can

There will be around 3 million tons of cold rolled stainless production capacity will be put into market while the supply of hot rolled stainless steel production is in decrease. So now the HR is more scarce than cold rolled.

 

So, these four factors influence the market and make the stainless steel price rise of HR stainless steel products more heavily than cold rolled stainless steel products.

2018-02-11T10:46:18+00:00 August 6th, 2017|Blog, Market Trend|