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.

steel material for gas cylinders

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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