Posted on 16 Sep 2024
Prices of 304-grade stainless steel flat products in China continued to decline during the week of September 4-11, driven lower by weakening costs of key raw materials, which have eroded market confidence.
As of September 11, Mysteel's assessed price of 304/2B Hongwang 2*1240mm cold-rolled stainless coil (CRC) in Wuxi, a major production hub in East China's Jiangsu province, was at Yuan 13,500/tonne ($1,983.9/t) in-warehouse, including 13% VAT. This marked a decline of Yuan 100/t from the previous week.
Similarly, the spot price of 304/No.1 Tsingshan 5*1520mm hot-rolled stainless coil (HRC) in Wuxi was lower by Yuan 200/t on-week at Yuan 13,100/t in-warehouse, including 13% VAT, also by Wednesday.
Market watchers attributed the decline to falling prices of nickel pig iron (NPI) and ferrochrome (FeCr), both key raw materials in stainless steel production.
Mysteel's survey revealed that by Wednesday, the price of 8-10% grade NPI in Jiangsu had dropped by a notable Yuan 20/mtu from September 4 to settle at Yuan 990/mtu, including delivery and 13% VAT.
Meanwhile, the price of high-carbon FeCr with 55% chromium content in North China's Inner Mongolia had dropped by Yuan 100/t on-week to reach Yuan 8,500/t ($1,194.7/t) (50% Cr) ex-works, marking a nine-month low.
In the derivatives market, stainless steel futures experienced an even sharper decline during the past week. By the end of Wednesday's daytime trading session, the most-traded November contract on the Shanghai Futures Exchange (SHFE) had fallen by Yuan 330/t from September 4 to settle at Yuan 13,150/t.
This sharp drop widened the futures-spot price spread, prompting speculators to buy up low-cost futures-standard stainless CRC in warehouses, sources said. Consequently, SHFE's stainless steel receipt inventory had declined by 9,078 tonnes week-on-week to 112,984 tonnes by the close of Wednesday's session, according to the exchange's data.
Thanks to the shrinking receipt inventory, total inventories of austenitic-grade stainless CRC and HRC in the 89 stockyards tracked by Mysteel in Wuxi and Foshan, another major trading hub in South China, had also fallen by a notable 3.26% on week to 652,099 tonnes as of September 12.
Source:Mysteel Global
