Posted on 07 Apr 2023
The downward slide in Chinese prices of 304-grade stainless steel that started in late February continued during the March 30-April 6 week, as demand stayed tepid and reduced production costs for stainless makers removed some cost support the prices had enjoyed, market sources observed.
As of April 6, the spot price of 304/2B 2mm stainless cold-rolled coil (CRC) in Wuxi, a major stainless trading hub in East China's Jiangsu, had dropped to a two-year low of Yuan 15,400/tonne ($2,237/t) in-warehouse and including the 13% VAT, down by another Yuan 500/t on week, Mysteel's survey showed.
In parallel, the spot price of 304/No.1 5mm stainless hot-rolled coil (HRC) in Wuxi on April 6 was also Yuan 800/t lower from the prior week at Yuan 14,300/t in-warehouse and including the 13% VAT, Mysteel's assessment showed, also touching a two-year low.
Though March and April are usually strong months for stainless consumption in China, to date demand has not shown any large improvement, so the prices of most series products have kept weakening during these few months, according to a Shanghai-based market source.
Sentiment in the market has turned particularly negative recently, as market players fear that prices of austenitic grade stainless may fall soon, impacted by the steady drop in prices of nickel pig iron (NPI), the source added.
Mysteel's latest assessment showed that the price of 8-12% grade NPI in Jiangsu had decreased to Yuan 1,090/mtu including delivery and the 13% VAT by April 6, hitting a new low since April 2021 after an on-week dip of Yuan 95/mtu.
With nervousness pervading the market mood, many stainless traders clipped offering prices for their 304 stocks, aiming to boost sales and so ease the pressure on their finances, according to her.
In fact, though total inventories of 300-series stainless CRC and HRC at commercial warehouses in Wuxi and Foshan in South China's Guangdong fell for a second week during March 24-30, dipping by a tiny 1.1% on week to reach 654,672 tonnes, they were still 31.3% higher on year, the latest survey showed.
Nevertheless, "buying for 304 products among stainless users remains limited, because buyers have turned more prudent during the downtrend in prices," she observed.
Source:Mysteel Global
