Time to read the Stainless Steel Market Summary in China for last week. The weekly average prices of all major grades of stainless steel declined. One rose the most two weeks ago and fell the greatest. Stainless steel 316L, the weekly average price dropped by US$88/MT in one week. The biggest reason is the sluggish demand which is far lower than people's expectations. The inventory remains high, which also dragged down the prices. To resist the large inventory and prop up the price, steel mills choose to reduce the delivery volume to the market. Nickel, the key element of stainless steel production, is more used in the new energy industry for making batteries in recent years. It is predicted that the consumption of nickel in the battery will keep increasing. It means that there might push up the price of nickel products. As for the sea freight, last week, it slumped all the way down as the global market is tepid currently.    
 

WEEKLY AVERAGE PRICES

Trend|| Steel mills swung the supply leftward in response to “price choking” from the downstream. 

The price movement of the stainless-steel series last week remains differentiated. Stainless steel 201 and 304 had a minor drop while 430 had stood still for a fortnight. The most traded contract price fell from US$12 to US$2560/MT. 
 

Stainless steel 300 series: Steel mills tightened the supply, and inventory fell. 

The market price was weakening last week. The most traded price of cold-rolled 4-foot mill-edge stainless steel 304 and hot-rolled 5-foot stainless steel 304 is quoted at US$2585/MT. 

The distribution of the 300 series was once again limited by Delong which aimed to support the stainless-steel price to maintain the profit margin. Seemingly Delong had made a splendid move to overturn the weak performance of the market transaction, the buyers and sellers found a new equilibrium point of around US$2570/MT. 
 

Stainless steel 200 series: High Inventory level was dragging down the price 

The spot price of stainless steel 201 was stabilized then had a slide last week in Wuxi. Both the most traded base price of cold-rolled stainless steel 201 and 201J2/J5 fell by US$15 to US$1555/MT and US$1450/MT respectively. The hot rolled 5-foot stainless steel remains steady at US$1500/MT. 
The market transaction of stainless steel 201 overall was weakly performed last week. 

Tsingshan had made an effort to remaining the price steady at the beginning of last week but then the price started to dip down on Wednesday and failed to reignite the transaction. The inventory level of both social inventory and preposition warehouse was considered high, and the price of the 200 series is likely to downtrading in the short term.
 

Stainless steel 400 series: Transaction turned subdued.

TISCO quoted the guidance price of stainless steel 430/2B at US$1525/MT, while JISCO quoted US$1510/MT.
Baoxin (Ningbo) announced the EXW price of cold-rolled stainless steel 430 in March: US$1695/MT.
The quoted price of 430/2B remains unchanged at between US$1390/MT-US$1400/MT.
 

Summary: 

The market is currently oversupplied and the inventory level is nearly poking through the ceiling. The stainless-steel price is likely to remain a strong momentum and roam around US$2555/MT.

Stainless steel 300 Series: High inventory level could be relieved soon by short supply and the hovering downstream buyers, the base price might be anchored at US$2555/MT.

Stainless steel 200 Series: While the cold-rolled 201J2/J5 landed at US$1445/MT, traders were holding a passive attitude toward the market trend and waiting for the next move of the steel mills. 

Stainless steel 400 series: The EXW price of high chrome had a slight drop and the chrome ore had depreciated. The Chrome Crude Ore South African (Cr2O3 40-42%) fell to US$8/MT. The most traded price of 430/2B hung around US$1390/MT-US$ 1400/MT. The market had quieted down after the strong momentum in the week before last week. 

 

Inventory|| Drop by 10,000 tons. A turning point in 300 series Inventory. 

As of February 10, the total inventory of stainless steel in Foshan and Wuxi was slightly destocked to 1.214 million tons, mainly due to the destocking in Wuxi. The output slope on the supply side is greater than the recovery slope on the demand side, and it is expected that there will be greater pressure on subsequent accumulation.

As for the sample warehouse, the inventory level at the Wuxi sample warehouse fell by 11,482 tons to 649,719 tons (as of 16th February). 



the breakdown is as followed:
200 series: 445 tons up to 46,060 tons
300 Series: 10,085 tons down to 511,029 tons
400 series: 1,842 tons down to 92,630 tons

 

Stainless steel 200 series: Price dropped, but no deal.

The tiny increment in inventory and dropped price last week failed to stimulate the appetite of the end-users who were still being conservative on the purchase activities. 
 

Stainless steel 300 series: A sudden U-turn in inventory.

Being the last one to lose weight after the Chinese New Year, the inventory of the 300 series was finally dropped, with a 10,000 tons reduction in the preposition warehouse of steel mills. 
 

Stainless steel 400 series: The rush faded away.

The inventory of 400 series continued to slide down last week despite the market being less active than the week before, less than 2000 tons was consumed. The downslope is estimated to be flatted.
 

RAW MATERIALS|| The production cost is flatted, for now. 

Nickel: New Energy ignited a greater demand for nickel 

• The ferronickel supply from Indonesia rose by 9.25% in December 2023 according to the latest finding, an extra stack on the surplus. 

• The production of nickel pig iron in January was 38,480 tons, a 6.68& rose from December 2022.

• The nickel consumption of the new energy is ascending. Ternary power battery, one of the solutions of new energy, consumed 3,196,000 tons of nickel cumulatively in 2022, a 50% rose compared to 2021.

Chrome: The supply of high chrome will be skyrocketed

The EXW price of high chrome is maintained at US$1460/MT-US$ 1485/MT(50% Chromium), while coke(ore) remains steady. 

The power grid in South Africa and the earthquake in Turkey are adding extra straw to the supply of high chrome. The high production cost still constrains some of the production activities. 

The new high-carbon ferrochrome program in Inner Mongolia is projected to activate in 2024, the 400,000 tons of estimated annual production volume will lift the high-carbon ferrochrome supply significantly in the long term. Another ferrochrome program also based in Inner Mongolia, scheduled for 1 million annual production volume, will start construction soon.
 

SEAFREIGHT|| Freight rate continues to head down. 

The “sinking feeling” is still haunting China's container transportation market Freight rates overall on multiple sea routes continued to dip last week. Until 17th February, the Shanghai Containerized Freight Index was downed by 2.1% to 974.66.

Europe/ Mediterranean: Until 17th February, the freight rate (maritime and marine surcharge) exported from Shanghai Port to the European major ports was US$910/TEU, an 1.6% decrease. The freight rate (shipping and shipping surcharges) for exports from Shanghai Port to the Mediterranean major ports market was US$1633/TEU, down by 5.3%

North America: Until 17th February, the freight rates (shipping and shipping surcharges) for exports from Shanghai Port to the US West and US East major ports were US$1,273/FEU and US$2,496/FEU, 1.5% and 2.2% fall accordingly. 

The Persian Gulf and the Red Sea: The market overall was stable. The average Berth Utilization Ratio in Shanghai port had surpassed 90%. Until 17th February, the freight rate (maritime and marine surcharges) exported from Shanghai Port to the major ports of the Persian Gulf had a 4.7% fall from last week's posted US$1079/TEU.

Australia/ New Zealand: Until 17th February, the freight rate (shipping and shipping surcharges) for exports from Shanghai Port to the major ports of Australia and New Zealand was US$369/TEU, which was downed by 10.9% from the previous week.

South America: The supply-demand in the freight market is now balanced, On 17th February, the freight rate (shipping and shipping surcharges) for exports from Shanghai Port to South American major ports was US$1508/TEU, a tiny drop (0.9%) from the previous week.