Posted on 08 Jun 2023
China's crude stainless steel output rose strongly in May, with the total volume jumping by 12.7% on month to reach 3.15 million tonnes, according to Mysteel's latest monthly survey among the country's 41 stainless producers.
Among the total, production of all grades of stainless increased by varying degrees in May, with the tonnage of 300-seriies stainless marking the sharpest on-month rise at 14.7%, the survey showed.
Stainless output among China's 41 mills in May (Unit: tonne)
Product | May | MoM(%) | YoY(%) |
200-series | 1,014,700 | 12.6% | 0.8% |
300-series | 1,620,800 | 14.7% | 13.6% |
400-series | 516,900 | 7% | -12.5% |
Total | 3,152,400 | 12.7% | 4.2% |
Source: Mysteel
The substantial growth was mainly due to the fact that many Chinese stainless producers resumed operations after completing maintenance on their steelmaking facilities over the prior two months. Meanwhile, their improved profit margins also encouraged the stainless mills to ramp up production, Mysteel Global learned.
Despite the rise in output, many domestic stainless mills continued to keep their shipments to traders' warehouses low to ease the supply-side pressure on the market, survey respondents said. This led to the continuous decrease in stainless inventories held by the traders.
As of June 1, total stainless stocks at the 42 warehouses in Wuxi and 25 warehouses in Foshan, China's two core stainless trading hubs, had declined for a fourth consecutive week to 841,406 tonnes, lower by 110,872 tonnes or 11.6% compared with one month before, according to Mysteel's regular survey.
However, as stainless demand from end-users was not so strong last month and global nickel prices also weakened, neither could lend much support to any sustainable rise in Chinese stainless prices, Mysteel Global noted.
Domestic stainless prices kept fluctuating last month, with the spot price of 304/2B 2mm stainless cold-rolled coil in Wuxi under Mysteel's assessment reaching Yuan 15,550/tonne ($2,184/t) in-warehouse and including the 13% VAT as of May 31, lower by Yuan 500/t from the end of April.
As of May 31, three-month nickel futures on the London Metal Exchange closed at $20,588/t, lower by $3,631/t compared with the end of April, according to the exchange's data.
Stainless output among the 41 surveyed mills is expected to reach 3.11 million tonnes this month, down 3.3% from that for May, Mysteel estimated.
During May, the combined output of crude stainless at the steel mills in Indonesia operated by Chinese makers Tsingshan Holding Group and Jiangsu Delong Nickel Industry Co registered 350,000 tonnes, down 4.6% on month, the survey showed. The tonnage for June may slip by another 2.9% on month to 340,000 tonnes.
Source:Mysteel Global
