Regarding stainless steel, Guotai Junan Futures pointed out that the domestic monetary policy of RRR cuts is loose, and the impact of production restrictions is superimposed. The expectation of stainless steel production is relatively high, and the futures are both rising. According to the requirements of the Ministry of Industry and Information Technology in January 2021: ensure that the output in 2021 will not be higher than the level of the same period in 2020, the stainless steel output in the first half of this year will increase by more than 25% year-on-year. Due to the serious overproduction in the first half of the year, the stainless steel industry will face greater pressure to reduce production in the second half of the year. At present, the downstream orders of steel mills are relatively good.

In order to lock in production profits, steel mills have over-replenished raw materials. The spot market appears to be difficult to find. The price of high-carbon ferrochromium is expected to continue to rise under the dual control policy of Inner Mongolia. The epidemic has intensified and the market is concerned about the limited production and shipment of ferronickel. From a fundamental logical point of view, stainless steel prices are expected to continue to trend upwards driven by the dual drive of supply contraction and rising costs. Follow-up will continue to pay attention to the implementation of Zhangpu and other steel mills that implement the strictest production restriction policy. Before seeing the implementation of the production restriction of steel mills, it is not recommended to continue to pursue higher unilaterally.