Posted on 17 Apr 2023
The combined inventory of finished stainless steel at commercial warehouses in Wuxi and Foshan, China's two core stainless trading hubs, posted a sharper fall of 6.3% on week over April 7-13 to reach 993,737 tonnes, as against the on-week decrease of 4.2% during the prior week, according to Mysteel's latest weekly survey.
Among the total, stocks in Wuxi in East China's Jiangsu province declined by another 4.3% on week, while the volume in Foshan in South China's Guangdong province dropped by 10% from the previous week during the same period, the survey results showed.
One major reason for the significant on-week decline was the fact that deliveries of stainless products to traders' warehouses were relatively low during the survey period.
In parallel, sentiment in the domestic market improved this week with the price controls that major stainless producers in China are imposing on agents, while some stainless users also returned to the market for replenishment, contributing to the decrease in stainless stocks, Mysteel Global learned.
For example, Tsingshan Holding Group, China's stainless giant headquartered in East China's Zhejiang province, last week instructed its agents and subsidiaries to comply with its strict pricing guidelines, forbidding them from selling its 304-grade stainless hot rolled coil for less than Yuan 14,200/t and its austenitic cold rolled coil (CRC) for under Yuan 14,500/t, as reported.
Chinese stainless prices in both the physical and futures markets recovered somewhat this week, with the spot price of 304/2B 2mm stainless CRC in Wuxi under Mysteel's assessment reaching Yuan 15,750/tonne ($2,304/t) in-warehouse and including the 13% VAT as of April 13, up Yuan 350/t on week and higher by Yuan 500/t from the recent low on April 10.
On Thursday, the most-traded stainless coil contract on the Shanghai Futures Exchange for May delivery closed the daytime trading session at Yuan 15,115/t, jumping by Yuan 615/t from the settlement price on April 6, the exchange's data showed.
Many Chinese stainless producers decided to slow their production pace this month to help ease the pressure of mounting stainless inventories, Mysteel Global noted.
Mysteel's latest monthly survey among the country's 41 stainless producers showed that their total stainless output this month may decrease by another 1.5% from March to 2.76 million tonnes, as reported.
Source:Mysteel Global
