Looking back at the steel market in 2019, there are judgments that are in line with expectations, and there are also big expectations. Steel production and sales have peaked in recent years, but the overall price is declining. Data as of the end of the year showed that the average price of steel composite price index in 2019 fell by 6.5% year-on-year, while the average price of imported iron ore index was US$93, a year-on-year increase of 34.6%. Although the profit of the steel industry fell by 42.3% in the first November. As a coating product at the end of the steel industry chain, how does tinplate perform in terms of production and sales, profit, import and export?

1. Review of the price trend of main raw materials of tinplate

1. The average price of domestic hot-rolled raw materials has moved down

Judging from the annual price trend, the price of hot-rolled raw materials for tinplate showed an overall downward trend. As of the end of December, the domestic average prices (including tax) of 3.0mm hot rolled and 2.3mmMR steel hot rolled were 3,903 yuan/ton and 4,201 yuan/ton, down 7.47% and 8.3% year-on-year. The average hot-rolled price is around 300 yuan. In addition, judging from the trend of the price difference between hot rolling in Guangdong market and 3.0mm hot rolling in Tianjin market, the price difference between the two is basically maintained at a reasonable level of about 200 yuan/ton (MR steel is 100-200 yuan/ton higher than ordinary hot rolling; 2.3mm Hot rolling is 100-150 yuan/ton higher than 3.0mm hot rolling). This shows that after entering 2019, steel mills' price adjustments for hot rolling will basically follow the market.

Figure 1: The price trend of hot rolling in Tianjin, Shanghai and Guangdong (unit: yuan/ton)

Data source: Steel Union data

2. Imported cold-rolled substrates are decreasing sharply year by year

From January to November 2019, domestic imports of cold rolled coil (thickness <0.5mm, 80% used as tinplate) totaled 7,532 tons, a year-on-year decrease of 1.5%. Since 2012, domestic imported cold-rolled substrates have been greatly reduced. On the one hand, domestic rolling material technology has gradually improved and gradually replaced foreign cold-rolled substrates; on the other hand, domestic tinplate joint ventures have improved equipment and technology, and MR hot rolling has largely replaced cold rolling Substrate. In terms of average import prices, the overall performance is a steady decline. The cumulative average price of imported cold rolled coil from January to November was US$732/ton, down 4.06% year-on-year.

Figure 2: 2018-2019 domestic imported cold rolled thickness <0.5mm (unit: USD/ton)

Data source: Steel Union data

3. The price of tin ingots tends to be high and then bottom

Judging from the price trend of 1# tin ingot in 2019, the overall trend is in a volatile downward trend. As of December 31, the data shows: Shanghai 1# tin ingot price is 140,250 yuan/ton, a year-on-year decrease of 4.49%; the annual average price is 141600 yuan/ton, A year-on-year decrease of 3.27%.

Figure 3: Shanghai 1# tin ingot price trend (unit: yuan/ton)

Data source: Steel Union data

2. Review of the fundamentals of the tinplate industry

1. The annual average price has shifted downward and the regional differentiation is serious

With the impact of the overall average steel price in 2019 showing a downward trend year-on-year, according to Mysteel data, the average price of hot-rolled 3.0mm ordinary plates was 3903 yuan/ton, down 315 yuan/ton year-on-year, a decline of 7.47%, corresponding to MR hot-rolled substrates The overall trend is declining. Looking at the market price trend of tinplate, the data as of December 31 shows: Shanghai DR8 0.16mm average price is 6,972 yuan/ton, a year-on-year decrease of 10.56%; Guangzhou MR0.23mm average price is 6,787 yuan/ton, a year-on-year decrease of 7.77%; Tianjin The average price of SPCC0.2mm was 5992 yuan/ton, down 6.43% year-on-year. Judging from the decline in tinplate, it is in line with the expected decline in steel prices throughout the year.

Figure 4: The price trend of tinplate in Tianjin, Shanghai and Guangdong (unit: yuan/ton)

Data source: Steel Union data

2. Production and sales continue to decline and inventory increases

According to Mysteel's incomplete survey data, there are a total of 72 production lines in 43 tinplate production enterprises across the country, including 54 tin-plating lines, 12 chrome-plating lines, and 6 tin (chrome) mixed production lines, which are eliminated and long-term overhauled. 9 lines. The tin plating capacity is 7.46 million tons, and the chrome plating capacity is 1.025 million tons. Affected by the overall reduction in steel profits this year, the overall output of tinplate has declined. The data shows that the annual output of tinplate in 2019 totaled 5.939,500 tons, down 5.1% year-on-year, (excluding obsolete and long-term overhaul capacity). Judging from the apparent consumption of tinplate, due to the impact of tariffs this year, the export of tin-plating plants has declined slightly, with annual sales falling by 5%-6%, and factory inventory increasing by about 10%.

3. Review of tinplate import and export

In 2019, the performance of domestic tinplate import and export data was fair, the growth rate of tin-plated iron exports slowed down, and the export of chrome-plated iron increased significantly.

(1) The growth rate of tin-plated iron exports slowed down, while imports continued to decline

According to customs data, from January to November, domestic tin-plated sheet exports totaled 1.036.5 million tons, an increase of 1.03% year-on-year; for the whole year of 2018, the total export volume was 1.1131 million tons. According to the export data for the second half of this year, the export volume in December was There is an increase, and the total export volume in 2019 is likely to exceed the total value of last year. Before 2010, the domestic tinplate export volume was in a downturn, but in 2011, the domestic tinplate export volume experienced a blowout growth, and then continued to increase steadily. The growth rate has gradually slowed down in the past three years.

Figure 5: 2016-2019 export volume of tin plate (unit: ton)

Data source: customs data

Customs data shows that from January to November, domestic imports of tinned sheets totaled 19,300 tons, a year-on-year decrease of 3.5%. With the improvement of domestic tinplate production technology, since 2014, domestic tinplate imports have dropped sharply, downstream enterprises no longer rely on imports, and both food-grade and non-food-grade tinplate can meet market demand in China.

Figure 6: 2017-2019 import volume of tin plate (unit: ton)

Data source: customs data

(2) Significant increase in imports of chrome-plated iron and significant decline in exports

Customs data shows that from January to November, domestic exports of chrome-plated iron totaled 240,200 tons, a year-on-year increase of 41.5%; during the same period, domestic imports of chrome-plated iron totaled 782 tons, a year-on-year decrease of 26.37%.

Figure 7: 2016-2019 annual export volume of chrome plating (unit: ton)