Posted on 18 May 2023
After presenting another dismal week over May 9-16, Chinese prices of 304-grade stainless steel assessed by Mysteel may meet further downward pressure in the near term, though the room for the prices to decline will be limited, according to market sources.
As of May 16, the spot price of 304/2B 2mm stainless cold-rolled coil (CRC) in Wuxi, a top stainless trading hub in East China's Jiangsu, moved down to Yuan 15,900/tonne ($2,278/t) in-warehouse and including the 13% VAT, Yuan 450/t lower on week, Mysteel's tracking showed.
Similarly, the spot price of 304/No.1 5mm stainless hot-rolled coil (HRC) in Wuxi dropped by Yuan 500/t from the prior week to Yuan 14,800/t in-warehouse and including the 13% VAT on May 16.
Many stainless traders hoped to attract more buying of their 304-grade products by lowering the offer prices, given that the recent demand for the grade among downstream users remained slack, according to a Shanghai-based market watcher.
Also, the source warned that the prices of 304-grade stainless steel may trend down further in the near term due to a possible accumulation in retail stocks of the grade.
"Traders' warehouses will receive more deliveries of 300-series stainless steel from mills that have maintained high production this month, while buyers' demand is unlikely to improve," she explained the increase in stocks.
Mysteel's weekly survey showed that the total stocks of 300-series stainless CRC and HRC at commercial warehouses in Wuxi and Foshan in South China's Guangdong reached 529,517 tonnes by May 11, down by 4.5% on week yet being 2.7% higher on year.
Nevertheless, the prices of 304 grade may earn some support from its higher production costs, according to the source. "Domestic nickel pig iron smelters will further hold onto their offer prices, as stainless mills have increased their buying for the raw material recently for their ramp-up of steel output," she said.
Source:Mysteel Global
