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2021 Semi-annual Analysis of Steel
- Main material for gas cylinders & tilt mechanisms
The raw materials of both the chair gas cylinders and tilt mechanisms are steel. As a chair gas cylinder manufacturer and also a tilt mechanism manufacturer, we pay close attention to the dynamics situation of the raw materials and respond promptly.
Review of Steel Prices in the First Half of 2021
In the half past 2021, the rising trend of steel raw materials and finished products changed greatly. From the perspective of price changes, the average price of raw materials in the first half of the year increased by 34.95%-83.80% year-on-year. While the average price of finished products increased by 18.91%-48.32%. The growth rate of raw materials is higher than that of finished products.
The increase in raw material prices is a major reason for the growth of finished products. Besides, the higher production enthusiasm of manufacturers is also a major factor supporting the increase in raw material prices. Throughout the process of price changes, raw materials and finished products form a linkage, and the price trend is relatively consistent.
1. Raw materials
Table 1 Raw material price changes in 2021 Unit: Yuan / Ton
Item
Iron ore
Scrap steel
Pig iron
Billet
End of June
1480
3352
4680
4910
Beginning of January
1100
2754
3890
3300
Average price of the first half of 2021
1250
3078
4373
4575.91
Changes from the first half of 2020
83.80%
34.95%
38.12%
43.24%
Changes from the second half of 2020
37.90%
23.37%
30.03%
31.50%
According to the above table, the price trend of raw materials is relatively consistent, and the occurrence time of high and low points is basically the same. In terms of the average price in the first half of 2021 compared with the that of 2020, iron ore saw the largest increase at 83.80%. Then it followed by billet with a 43.24% increase, while pig iron and scrap steel saw relatively small increases. They respectively were 38.12% and 34.95%.
The main reason for the price increase is that the overall supply is still tight, the downstream demand has continued to be strong. Besides, international demand has also performed well in the process of global economic recovery.
2. Finished products
Table 2 Steel price changes in 2021 Unit: Yuan/Ton
Item
Rebar
Hot rolled coils
Medium Plate
Cold rolled steel
Galvanized plate
Strip steel
Special steel
Profile steel
Seamless pipe
Welded pipe
Stainless steel
End of June
4856
5420
5347
6175
6530
5230
5296
5150
5690
5330
17800
Beginning of January
4303
4594
4569
5741
6260
4220
4960
4140
4930
4420
15225
Average price of the first half of 2021
4839
5241
5237
5990
6304
5046
5356
4948.2
5566.84
5109
16690.78
Changes from the first half of 2020
32.83%
44.49%
40.03%
43.74%
43.63%
48.32%
39.33%
41.12%
34.01%
40.36%
18.91%
Changes from the second half of 2020
26.18%
28.49%
29.34%
24.68%
25.13%
29.45%
28.47%
20.63%
29.35%
26.49%
12.58%
From the perspective of finished products, the highs and lows in the first half of the year were basically the same. The highs were generally around May 13, and the lows appeared in January. The item with a larger year-on-year average price increase was strip steel, with an increase of 48.32. %. And it’s followed by hot-rolled coils, with an increase of 44.49%. Other finished products, except for stainless steel, which is 18.91%, are all above 30%.
The reasons for the rising price of raw materials
The rise in raw material prices is mainly due to the following aspects.
(1) The global economy is recovering and the currency is over-inflation.
(2) The emission of high-polluting projects is banned, and the market mentality is improved.
(3) The price of raw materials rises, and black futures form a resonant rise.
(4) Some varieties have higher international prices, and domestic exports have advantages.
The cost of raw materials and production cost increase in direct proportion. Among them, seamless pipes are the main raw materials for gas cylinders. From the data in the above table, the year-on-year increase is 34%. Therefore, the unit price of gas cylinders has to increase by more than 34% compared with last year.
In the second half of 2021, it can be seen that with the continuous improvement of the effectiveness of epidemic prevention and control and the continuous improvement of vaccination ratio, the global economy will further recover.
China’s economy is expected to continue to operate steadily and well. While the manufacturing industry is gradually improving in the process of repair, or there may be more obvious room for growth. The demand for steel is bound to increase, and the short-term goal of the steel industry to achieve low carbon emissions is bound to reduce crude steel production. Experts predict that the price of raw materials will increase further in the second half of the year.
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