The pattern of internal strength and external weakness is about to emerge, how can overseas stainless steel enterprises exert their efforts

In 2022, due to the impact of supply chain issues such as the repeated outbreak of the epidemic and the rise in energy prices caused by the Russia Ukraine incident, coupled with the backdrop of inflation, the global economy has shrunk to a certain extent, and steel consumption in Asia, Europe, and South America has shown a downward trend.

In mid February 2023, Germany's largest steel company, ThyssenKrupp, released its first quarter performance report for the fiscal year 2022/2023, which showed a decrease in group order volume and adjusted pre interest tax profit. The Chief Financial Officer of ThyssenKrupp stated that the future economic development situation is still uncertain, and at this stage, efforts need to be made to improve performance and production efficiency, while firmly promoting the transformation of the group. Overseas companies are facing the risk of recession, and major stainless steel mills around the world are actively taking measures to respond.

1、 ThyssenKrupp Stainless Steel

The first quarter performance report for the 2022/2023 fiscal year shows that the overall sales of the group remained unchanged from the same period in the previous fiscal year, at 9 billion euros; The order amount (9.2 billion euros) and adjusted EBIT (254 million euros) were lower than the previous fiscal year, but in line with expectations. The main reasons for the decrease in order volume and adjusted EBIT are the decrease in material prices and the change in the strategic development business investment portfolio within the group.

In the face of the stainless steel market in 2023, ThyssenKrupp still expresses good expectations: adjusted pre interest and tax profit is within the range of mid to high digit billions of euros; Net income and Free cash flow before M&A are expected to reach balance.

2、 Nippon Steel Corporation

In 2023, Nippon Steel expects the group's crude steel production to reach 90-95 million tons. China is the main overseas market for Nippon Steel, and the demand situation for stainless steel procurement in China from February to March 2023 is crucial for Nippon Steel Group's production. Judging from the current performance of China's stainless steel market, the current high inventory is still difficult to mobilize market sentiment, but in the medium and long term, the trend of economic recovery remains unchanged, and the demand space for stainless steel may increase slightly this year.

3、 Ansel Mittal Steel Group

According to Reuters, ArcelorMittal expects its steel shipments to increase by 5% in 2023, with positive cash flow and capital expenditure of between $4.5 billion and $5 billion. Due to the global economic slowdown last year, the shipment volume of Arcelor Steel Plant under the group decreased by 11%. The company stated that global steel demand is expected to rebound in 2023, and the expected 5% increase in steel shipments is also based on this prediction.

Brazil is the primary overseas market for ArcelorMittal Group, followed by the United States and Germany, while sales in the Chinese market have decreased. ArcelorMittal has provided support for China's midstream manufacturing and raw materials industries in the past. With China's investment in infrastructure and real estate this year, its sales in the Chinese market are expected to slightly rebound.

The contraction of overseas consumption and demand in 2023 may continue, and with the recovery of demand after the holiday and the implementation of policies, the Chinese economy may experience a mild recovery, with a pattern of strong internal and weak external strength about to emerge. According to Mysteel's research, the import volume of stainless steel in China in 2022 was 3.285 million tons, a year-on-year increase of 12.21%. It is expected that the stainless steel reflux in Indonesia will continue in 2023. At this time, some large overseas stainless steel enterprises will target the Chinese market. We will wait and see how the import and export performance will be this year.