SunSirs: Stainless Steel Prices Fell Slightly in August

Price trend

According to price monitoring by SunSirs, stainless steel prices saw a slight decline in August. By the end of the month, the spot price of stainless steel stood at 13,108.33 RMB/ton, down 2.53% from the 13,448.33 RMB/ton recorded at the beginning of the month, yet up 8.37% year-on-year.

Data from SunSirs’s annual stainless steel price comparison charts over the past five years show that stainless steel prices remained largely firm in August, primarily due to extensive maintenance work at steel mills during that month.

Fundamental Analysis

Raw Materials:

The premium for nickel pig iron (NPI) has narrowed rapidly, with prices edging down to 1,125–1,135 yuan per nickel point, though ore prices provide a floor for support. Ferrochrome production remains high while steel mill tender prices have been repeatedly lowered, causing some producers to face inverted margins. Ferromolybdenum prices remain firm, supporting the 316 stainless steel series. Stainless steel scrap prices have weakened in tandem, yet the material retains its cost-effectiveness. Prices for finished products are falling faster than those of raw materials, squeezing smelting margins and pushing the industry toward the break-even point, thereby marginally weakening the cost-based price floor.

Supply Side:

In August, the stainless steel supply side maintained an expansionary trend characterized by high production scheduling and output. According to Mysteel data, domestic crude stainless steel production scheduling for August totaled 3.6914 million tonnes—up 3.11% month-on-month and 11.33% year-on-year—marking a historical high for the period. Specifically, scheduling for the 300-series reached 1.9755 million tonnes, a significant month-on-month increase of 7.41%, driven by the concentrated resumption of production lines that had previously undergone maintenance; consequently, the volume of marketable resources remained ample. Regarding cold-rolled products, scheduled output for August was 1.4401 million tonnes, up 5.07% month-on-month. Inventory pressure rose in tandem; as of August 28, total social inventory stood at 1.1051 million tonnes (up 3.42% month-on-month), while steel mill inventories climbed to 1.108 million tonnes, also a historical high for the period. 300-series inventory increased by 3.22% month-on-month, with the accumulation concentrated primarily in hot-rolled products. The momentum of supply-side expansion is unlikely to reverse in the short term, serving as a key factor suppressing prices.

Demand side

August was characterized by typical "off-season weakness" and the failure of the anticipated "peak season ramp-up" to materialize. Amid the traditional consumption off-season, orders from key downstream sectors—such as real estate decoration, elevators, and home appliances—remained generally sluggish; processing enterprises largely adhered to a "buy-as-needed" strategy, showing minimal willingness to proactively build inventory. As August drew to a close, the expected pre-stocking ahead of the "Golden September" peak season failed to occur, with downstream sectors showing no active plans to stock up. Transactions consisted primarily of turnover among traders rather than actual end-user consumption, resulting in insufficient spot market volume. The export sector faced similar pressure; cumulative stainless steel exports from January to July totaled 2.4505 million tonnes—a year-on-year decline of 465,800 tonnes (16%). The implementation of anti-dumping measures by Japan further dampened export outlooks, while the diversion of overseas orders intensified competition in the domestic spot market. The conflict between insufficient demand elasticity and supply rigidity continued to escalate.

Stainless steel inventory

Stainless steel inventories rose in August. By the end of the month, total stainless steel inventories stood at 1.155 million tonnes, an increase of 6.29% from the beginning of the month.

Influencing Factors

On the raw material front, Indonesia's Ministry of Energy and Mineral Resources confirmed it would not increase nickel ore quotas under the RKAB scheme for 2026, effectively dispelling earlier market expectations of looser supply driven by rumors of supplementary quotas for WBN; meanwhile, quotes for high-grade nickel pig iron (NPI) held steady around 1,150 yuan per nickel unit, with ore costs providing a degree of price support. However, port inventories of chrome ore remained high, and tender prices from major steel mills were generally lowered in August, causing cost support for ferrochrome to weaken further. Regarding trade policy, Japan’s imposition of provisional anti-dumping duties on Chinese cold-rolled stainless steel, combined with a continued decline in exports, has placed pressure on both domestic and overseas demand. Additionally, a sudden safety incident at an NPI smelter in East China in August briefly drove up futures prices, but verification showed the impact on actual production schedules was limited, and the short-term market sentiment quickly subsided. Overall, the market is characterized by a three-way tug-of-war: strong cost support, a drag from weak demand, and policy-related disruptions.

Market Outlook

In summary, the tightening of Indonesian RKAB nickel ore quotas continues to unfold, providing a cost floor for the market. While some steel mills are jointly cutting production to manage supply—and the restocking window ahead of the mid-to-late "Golden September" peak season may bring marginal improvements—the listing of stainless steel futures and options on the SHFE is expected to boost market activity. However, the combination of recovering production schedules for the 300-series and the lingering off-season makes it difficult to reverse the pattern of strong supply and weak demand; furthermore, persistent export barriers and slow inventory destocking severely limit the scope for a rebound. August is expected to see wide fluctuations—starting weak before strengthening—with the turning point hinging on the finalization of quotas, steel mill production plans, and the pace of consumption recovery; a sustained upward trend is unlikely until the supply-demand dynamic improves substantially.

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