Posted on 30 Nov 2023
With weak market fundamentals such as lower production costs and supply-demand imbalance, China's 304-grade stainless steel saw its prices continue to slip during November 21-28, according to market sources.
The spot price of 304/2B 2mm stainless cold-rolled coil in Wuxi, a top stainless trading hub in East China's Jiangsu, eased to Yuan 14,200/tonne ($1,986/t) in-warehouse and including the 13% VAT on November 28, down by another Yuan 250/t on week, Mysteel's assessment showed.
By the same day, the spot price of 304/No.1 5mm stainless hot-rolled coil in Wuxi was also Yuan 100/t lower from the prior week at Yuan 13,200/t in-warehouse and including the 13% VAT.
Recently, the major force that brought Chinese 304 stainless prices down was the persistently weakening prices of nickel pig iron (NPI), a Shanghai-based market watcher observed.
Behind the drops in China's NPI prices was subdued demand from domestic stainless mills that had reduced production during the recent two months, plus a high supply of NPI from both domestic and overseas markets, she explained.
Consequently, the price of 8-10% grade NPI in Jiangsu province under Mysteel's assessment fell by another Yuan 40/mtu on week to Yuan 950/mtu including delivery and the 13% VAT on November 28, touching the lowest since April 2020.
On the other hand, there has been an oversupply of 304 stainless products in the domestic market recently, which was a result of slackened stainless demand among downstream users and the gradual resumption of some stainless mills at the end of November, the source added.
"Although many stainless mills made plans to conduct maintenance on their production facilities over October-November due to large losses they suffered from selling most stainless products, some mills started to resume their production of late after their margins improved with lower production costs," she said.
Also, the source projected that Chinese prices of 304-grade stainless steel may stay weak in the near term, because the market fundamentals are likely to maintain the current features.
Source:Mysteel Global
