Executive Interviews

Asian Metal: Thank you very much for taking our interview, Mr. Wang. Please introduce your company briefly.

Mr. Wang: Wuxi JISCO Bochuang Steel Co.,Ltd. is a sales company registered by Gansu JISCO Hongxing Iron and Steel Co.,Ltd. in Wuxi, Jiangsu Province in January 2007. It is a sales company established to sell stainless steel products of JISCO in East China. The company has a registered capital of 50 million yuan. With the concept of "integrity, responsibility, preciseness, seriousness, service and efficiency", the company is dedicated to providing high-quality stainless steel products and services to customers across the country. The stainless steel branch of Gansu JISCO Hongxing Iron and Steel Co., Ltd. is the third domestic stainless steel enterprise with a complete supporting whole process from steel making, hot rolling to cold rolling, with an annual production capacity of 1.2 million tons of stainless steel. The stainless steel products produced by the company are widely used in household appliances and kitchenware, automobile exhaust systems, elevator panels, ship boards, petrochemical equipment, nuclear power equipment, hydropower equipment, medical equipment and other fields.

Asian Metal: Since May, domestic stainless steel prices declined on the whole whole. What do you think are the main reasons for the price decrease?

Mr. Wang: After the sharp rise of domestic stainless steel prices last year, they have been in a higher position for a long time. Affected by the domestic epidemic and the decrease in demand of downstream industries, the domestic stainless steel prices have accelerated to drop since May this year. Taking 304 grade stainless CRC as an example, the prices of the material with 2.0mm has decreased from RMB21,000/t (USD2,917/t) at the end of March this year to RMB18,000/t (USD2,500/t) at present, with a cumulative decline of RMB3,000/t (USD417/t) or more than 10%.

Asian Metal: After the National Day holiday, the prices of 300 series stainless steel products in domestic market went up. What do you think of the recent price increase?

Mr. Wang: After the National Day holiday, domestic market prices of 304 stainless steel rose by about RMB600/t (USD83/t) mainly supported by higher raw material prices and the increase in steel mills’ EXW prices. However, according to the market feedback, the demand of the downstream industries has not improved significantly at present. Market transactions were mostly made among traders, and downstream customers still purchased materials sparingly due to insufficient orders.

Asian Metal: How about the current domestic stainless steel production?

Mr. Wang: Recently, the stainless steel market has been in a continuous downturn. Many steel mills have reported the poor sales of finished products. In addition, the cost has been inverted for a long time. Some stainless steel mills have begun to reduce or limit the production. In the first half of 2022, the national output of stainless crude steel totaled 16.354 million tons, a decrease of 908,000 tons or 5.26% compared with the same period in the first half of 2021. In 2021, Hongxing Iron and Steel produced about 965,200 tons of stainless steel, while in the first half of this year, the output is only 433,500 tons. It is estimated that the annual output in 2022 will be lower than that of last year.

Asian Metal: Recently, the domestic epidemic situation has been repeated. What is the current situation of logistics and transportation in East China?

Mr. Wang: Logistics transportation in East China was greatly affected by the epidemic in the second quarter. At that time, due to traffic control, the freight in many places once doubled or even quadrupled. However, with the control of the epidemic, the current logistics and transportation situation has returned to normal, and the freight rate has also dropped to the regular level.

Asian Metal: How about the demand for stainless steel from downstream industries recently?

Mr. Wang: I would like to start from the end industry demand. From January to September this year, the sales area of commercial housing was 1,014.22 million square meters, down by 22.2% year on year, including residential sales area down by 25.7%. The sales volume of commercial housing was RMB9,938 billion, down by 26.3%, of which the sales volume of residential housing went down by 28.6%. In addition, from January to July, the production and sales of automobiles were 14.571 million and 14.477million respectively, with a year-on-year increase of 0.8% and a year-on-year decrease of 2%. Affected by the epidemic situation at home and abroad, the orders of downstream industries have declined this year compared with last year, and their demand for stainless steel has also decreased accordingly. In addition, the continuous price decrease of stainless steel products in recent months has also intensified the wait-and-see mentality of customers, and the market transaction is relatively unsatisfactory.The performance of industries such as real estate and automobile continues to be sluggish, and the demand for stainless steel products in these industries also decrease accordingly.

Asian Metal: What is your prediction of the domestic stainless steel market in the fourth quarter?

Mr. Wang: With the improvement of the epidemic situation at home and abroad, the demand of the downstream industry will rebound, and the domestic stainless steel prices are expected to go up at that time. Taking 304 grade stainless CRC as an example, it is estimated that the market prices will further increase by about RMB1,000/t (USD139/t) in the fourth quarter.

Asian Metal: Do you have any new plans for product and market development?

Mr. Wang: We plan to provide customers with more qualified and detailed supporting services to better meet their personalized needs, to help customers reduce the cost and prices of materials to win more orders, to speed up the turnover of materials, and to ensure the healthy flow of funds and a safe life this year.