SunSirs: Falling Raw Material Prices Led to a Slight Drop in Stainless Steel Prices (October 20-24)

Price trend

According to SunSirs price monitoring, stainless steel prices fell slightly last week. As of October 24, the average daily price of 304/2B stainless steel flat sheet (1.0*1219*2438mm, tolerance 0.91) was 12,007.14 RMB/ton, down 0.47% from the beginning of the week and 6.04% year-on-year.

According to the price difference analysis tool of SunSirs, the prices of nickel and stainless steel were basically similar, with the price changes of stainless steel lagging slightly.

Analysis review

Last week, stainless steel inventories totaled 1.027 million tons, down 1.33% from the previous week, with both cold rolled and hot rolled inventories falling.

Raw materials: Ore prices remained firm. With the rainy season approaching in the Philippines' main producing areas, some mills in northern China began preparing raw materials. Ferronickel prices were declining, exacerbating losses for domestic and Indonesian ironworks. Market quotations were concentrated around 935-940 RMB/nickel (bottom price including tax), widening the price gap between supply and demand. The ferrochrome market was performing weakly but steadily. The sluggish stainless steel market was indirectly impacting the ferrochrome market. Coupled with a slight decline in chrome ore prices, ferrochrome transaction prices were declining.

Supply and Demand: The estimated crude steel output of 43 domestic stainless steel mills in September was 3.4513 million tons, a month-on-month increase of 135,700 tons, or 4.09%, and a year-on-year increase of 5.07%. Crude steel production was expected to continue to increase in October, putting pressure on the supply side. Peak season demand had not significantly boosted demand. Some speculative demand was released in September, coupled with continued high exports. Apparent consumption rose month-on-month, but year-on-year growth remained low.

Market Forecast:

Expectations of easing interest rates and cuts were rising both domestically and internationally. While costs were supporting the mining sector, ferronickel prices were weakening. Peak season demand was boosting downstream demand only slightly, and steel mills were experiencing slow arrivals, which was slightly easing inventory pressure. In the short term, stainless steel prices are expected to fluctuate and weaken.

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