Sagging market fundamentals during June 7-14 continued to pull down Chinese spot prices of 304-grade stainless steel, with stainless consumption still indifferent while stocks remained high, market sources said. Lower production costs among stainless makers contributed little to bolstering prices as well, they said.
The spot price of 304/2B 2mm stainless cold-rolled coil (CRC) in Wuxi, a core stainless trading hub in East China’s Jiangsu, had fallen to Yuan 19,800/tonne ($2,936.3/t) in-warehouse and including the 13% VAT as of June 14, down by another Yuan 400/t on week, according to Mysteel’s assessment.
Similarly, the spot price of stainless 304/No.1 5mm hot-rolled coil (HRC) in Wuxi declined by Yuan 550/t on week to a five-month low of Yuan 18,200/t in-warehouse and including the 13% VAT.
“End-user demand for stainless has yet to show any signs of reviving, with transactions in the major stainless trading markets remaining dull,” a Shanghai-based market watcher remarked.
“During the first few days after the Dragon Boat Festival holiday (over June 3-5), we did see some buyers enter the market to replenish stocks, but this was just a passing fad and trading activity cooled shortly after that,” he said.
Specifically, consumption of stainless among steel users in East and South China was also impacted by seasonal downpours which seriously hampered work at construction sites, he observed.
Also, “stainless demand in East China is still in slow recovery mode after businesses were hit hard by Shanghai’s COVID-19 lockdown over the past two months,” he added.
Meanwhile, availability of all grades and types of stainless products still appears quite sufficient, given that stocks digestion among end-users is still slow, according to him.
For example, total inventories of 300-series stainless CRC and HRC at commercial warehouses in Wuxi and Foshan in South China’s Guangdong were 38% higher on year at 494,929 tonnes over June 3-9, Mysteel’s latest survey showed. The stocks had slipped by 2% on week however, partly due to traders’ cautious buying of stainless amid the weak market.
On the other hand, “the continuous fall in prices of stainless steelmaking raw materials also contributed to the lower prices of 304 stainless,” he said.
As of June 14, the price of 8-12% grade nickel pig iron in Jiangsu had dropped for the sixth week by another Yuan 30/mtu on week to Yuan 1,505/mtu including delivery and the 13% VAT, Mysteel’s survey showed.
Written by Lea Li, liye@mysteel.com
Note: This article has been published in accordance with an article exchange agreement between Mysteel Global and SteelMint.
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