It has been more than three months since the cancellation of export tax rebates for boron containing steel, which was previously approved through export; Boron containing steel; Steel mills that have received tax refund subsidies have also begun to shift their focus to maintaining this portion of their profits; Chromium containing steel; On the order, it was previously stipulated that steel products with a boron content of 0.0008% or above can be declared as alloy steel, with a tax refund rate of 5% -13%. However, if you still want to obtain a 13% export tax refund, you need to adjust the production of boron to chromium, with an additional requirement of 0.3%. Although the cost has increased, many steel companies are still eager to try compared to the amount of export tax refund.

According to customs statistics, a total of 30117500 tons of boron containing steel were exported nationwide last year, with an average export price ranging from 476 to 521 US dollars per ton. Among them, the tax refund rate for bars and medium plates was 13%, and the tax refund rate for wire rods and hot rolled narrow steel strips was 9%. After calculation, an average of 383 yuan per ton of steel can be obtained for bars, 276 yuan for wire rods, 420 yuan for medium plates, and 273 yuan for hot rolled narrow steel strips, respectively. However, a 0.3% Cr content only takes up about 38 yuan in cost.

We make a model assumption and assume that this portion of orders will not increase or decrease for 15 years, but will be converted to chromium containing steel. Based on the 55% Cr content in chromium iron, we need 3011.75 * 0.3%/55%=164000 tons of chromium iron, which is equivalent to the annual procurement volume of a medium-sized stainless steel factory. Even if this portion is discounted in half, the 82000 tons quantity can still cause a ripple in the current market situation where chromium iron supply and demand are basically balanced.

From the procurement of ferrochrome by these relevant steel mills in the past two months, it can be seen that the main characteristics are low single quantity, high price, and unstable procurement. Although there has not been a significant change in the overall industry operating rate and price of ferrochrome, the pricing power of ferrochrome is still dominated by large stainless steel factories. However, the retail market of ferrochrome has shown a clear upward trend, Can this trigger adjustments or even changes in the upstream and downstream patterns of the ferrochrome industry in the later stage? The author will now conduct a simple analysis based on some data from the 2014 ferrochrome industry itself.

According to our website's statistics, the national production of ferrochrome in 2014 was around 4.53 million tons, with 2.06 million tons of imported ferrochrome and a total supply of 6.59 million tons of ferrochrome; According to the association's statistics, the national crude steel production of stainless steel in 2014 was 21.69 million tons, which translates to a demand for 6.3 million tons of ferrochrome. There is an excess of about 300000 tons of ferrochrome, which explains why the sudden increase in ferrochrome demand only caused resource scarcity and price inflation in the retail market, and did not have a significant impact on stainless steel factories that have been pricing through public bidding and ferrochrome factories that produce according to orders.

In 2014, the production of stainless steel crude steel increased by 14.26% year-on-year, domestic ferrochrome production increased by 10.48% year-on-year, and imported ferrochrome increased by 11.97%. The growth rate of China's ferrochrome production and import (collectively referred to as supply) has lagged behind the growth rate of stainless steel crude steel production (i.e. demand). The previous situation of severe excess ferrochrome production has gradually shifted to a supply-demand balance, This is also the current situation where although downstream stainless steel prices are weak and other stainless steel raw materials such as nickel and stainless steel waste are also declining, ferrochrome is standing out. In the short term, with no significant changes in domestic operating rates and stable imports, domestic ferrochrome prices will still be strong. However, the strong prices will also stimulate some factories to consider expanding production, especially after the southern region enters the wet season, electricity costs will decrease, In the case of profitable ferrochrome, production will increase, and the increase in production will break the current supply-demand balance. At that time, ferrochrome may not rule out the possibility of synchronously decreasing with the price of stainless steel.

Based on the above, the conversion of boron containing steel to chromium containing steel will indeed contribute to the domestic demand for ferrochrome, and can also affect prices for a certain period of time and within a certain range. However, due to the basic balance between supply and demand in the upstream and downstream of the ferrochrome industry, and even a slight surplus, and the main users of ferrochrome are still stainless steel factories, the industry pattern will not change. The pricing power of ferrochrome will still be dominated by large downstream stainless steel factories, The production of ferrochromium will also mainly refer to stainless steel factories and analysis; Chromium containing steel; Make adjustments to the impact of the domestic chromium market on the stainless steel market.