China's stainless steel production, prices expected to rise

    Stainless steel prices and production are expected to increase in 2017 in China, Metal Bulletin learnt at the China Steel Industrial China Development Summit held in Beijing last week.
    In the past few months, stainless steel mills had seen their profit margins increase due to high prices of stainless steel, which in turn encouraged them to raise their output. 
    "Stainless crude steel production is estimated to rise 13% to 24.37 million tonnes in 2016," Ding Zhiqiang, who is senior manager at Baosteel Resources’ metal trading department, said.
    A number of mills also added new production facilities. 
    "Some of these facilities are expected to start production in 2017, which may lead to output rising by 11-12% [next year]," Han Jianbiao, the manager of local data provider Custeel’s stainless steel department, said. 
    But trading company Ouye Resources’ industry information director, Yao Qizhong, said the rise in crude stainless steel output is likely to be lower, at 7-8%, pointing to government measures to cut capacity.
    For prices, production cost will still be the main supporting factor for any upward movement. 
    "The tight supply of nickel will keep supporting stainless steel prices," Ding said.
    "It will be hard for the production of chrome ore to rise, so ferro-chrome prices still have a chance to increase," Li Hongbo, a director of trading company Tianjin Zhongwei Group, said.
    On the demand side, Custeel’s Han expects its growth to slow down amid measure being introduced to cool down China’s property market in major cities such as Shanghai and Tianjin.
    Competition from other countries such as the Philippines and Indonesia is also expected to weigh on Chinese stainless steel exports, Han added.

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