China's stainless steel seamless pipe export keep in a good situation unchanged

China's exports continued to beat expectations in August. Indirect export of stainless steel seamless pipe is still strong. Looking into the trend of steel export (including indirect export, the same below), there are two main factors that will become export support in the future. First, the depreciation of the RMB exchange rate against the US dollar has improved the export competitiveness of Chinese stainless steel and steel consuming products, including stainless steel coils, stainless steel sheet plates, stainless steel pipes, stainless steel bars. The monetary policies of China and the United States have been at odds this year. While the US Federal Reserve aggressively raised interest rates, China's monetary policy was dominated by China, which implemented relatively loose monetary policy and lowered the reserve requirement ratio and interest rate for many times, resulting in the Sino-US currency spread and the depreciation pressure of RMB against the US dollar. The offshore renminbi fell below the "7" level against the dollar on September 15 and recently fell below the "7.2" level for the first time since February 2008. Looking forward to the future monetary policy trend of China and the United States, the market generally believes that the Federal Reserve will continue to aggressively raise interest rates due to the serious inflation situation, and the market even once rumored to raise interest rates by 100 basis points. Analysts say that the rate hikes by central banks in the U.S. and Europe could raise the global benchmark interest rate to nearly 4 percent, an increase of more than two percentage points from 2021. The World Bank reckons it may need to raise rates by as much as two percentage points if inflation is to be effectively tamed. In contrast, China's monetary policy is looser and financial institutions are likely to implement new interest rate and reserve requirement ratio cuts. As a result, there may be a new moderate depreciation of the renminbi against the dollar. The depreciation of RMB against US dollar, other conditions unchanged, has improved the export competitiveness of China's stainless steel seamless pipe and steel consuming products.

Second, the tight energy supply and sharp price rise in Europe and other countries will impact their steel production, providing China's stainless steel seamless pipe and steel consumption products demand space. For some time, because of the geopolitical influence, such as the war between Russia and Ukraine, some countries in Europe and Asia have been tight on energy supplies, and their prices have skyrocketed. For example, the price of electricity in France is five times that of last year, and the price of natural gas is 10 times that of last year. Similar situations exist in Germany, Japan and South Korea. The situation is expected to get worse as winter begins. If Russia completely "runs out of gas" to the EU, the production of high-energy-consuming metals and steel-consuming products in the region will suffer a great impact, or the price will be raised due to the cost pressure, which will also increase the demand space for Chinese steel and steel-consuming products. Analysts say that the energy crisis in Europe is turning into an industrial crisis and a crisis in steel production. According to the Confederation of German Industry, Germany's extra energy costs this year amount to more than 10 billion euros, equivalent to a quarter of the average annual sales of the German steel industry. The president of the Confederation of German Industry said that this would cause a major impact on the competitiveness of German steel products, which would be squeezed out by imports. Some companies are already suspending production, waiting for energy prices to fall. Supported by the above two factors, it is expected that China's stainless steel seamless pipe export year-on-year good situation unchanged. The annual stainless steel seamless pipe direct export to the possibility of increasing, stainless steel seamless pipe indirect export will remain strong. Shandong Chengshun Metal is a professional manufacturer of stainless steel products, including 201, 202, 304, 304L, 316, 316L, 409S, 410, 430, stainless steel coils, stainless steel sheet plates, stainless steel round bars, stainless steel flat bars, stainless steel seamless precision pipes. More information about stainless steel products, contact Krystal Liu, WhatsApp: 008618845135043 E-mail: krystal@chengshunmetal.com