Posted on 08 Jul 2024
China's spot market for 304 stainless steel enjoyed a notable uplift during the June 26-July 3 week, with prices driven up by the strong performance of futures on the Shanghai Futures Exchange (SHFE), Mysteel Global learned.
Mysteel's assessments reveal that prices for 304/2B Hongwang 2*1240mm stainless cold-rolled coil (CRC) in Wuxi, a key production hub in Zhejiang province, rose by Yuan 100/tonne ($13.75/t) week-over-week to Yuan 13,950/t in-warehouse as of July 3, inclusive of 13% VAT.
Similarly, spot prices for 304/No.1 Tsingshan 5*1520mm stainless hot-rolled coil (HRC) in Wuxi also increased by Yuan 100/t during the same period, reaching Yuan 13,400/t in-warehouse, including 13% VAT as of Wednesday.
In the derivatives market, the SHFE's most-active stainless futures contract for September delivery had surged by Yuan 300/t from the June 26 settlement price to close the daytime trading session on July 3 at Yuan 14,190/t, according to exchange data.
Despite subdued end-user demand typical of the off-season for stainless consumption, domestic stainless producers maintained firm pricing strategies in response to the bullish sentiment shown in the derivatives market.
For example, on July 4 Tsingshan Group, a prominent stainless producer in Zhejiang province, set its July sales price for 304 Hongwang stainless CRC at Yuan 13,700/t, up by Yuan 100/t from its previous price tabled on July 3. Prior to this, the company had held its list prices for 304 stainless unchanged for more than two weeks, Mysteel Global notes.
However, the reluctance of traders and end-users to stock up high-priced stainless products is causing stainless inventories in commercial warehouses in Wuxi and Foshan in South China's Guangdong to accumulate.
As a result, total inventories of austenitic grade stainless CRC and HRC in the stockyards in the two hubs tracked by Mysteel showed pause on July 4 from their three-week decline to register a tiny 0.54% increase, with the combined total reaching some 709,000 tonnes.
Source:Mysteel Global
