Quoted from Mysteel.com, 2021-09-23. Betty Qu - From Brilliant
Strong sentiment has prevailed in China’s stainless steel market since last week, mainly thanks to the reduction in supply caused by the intensified power restrictions in China’s major stainless steelmaking regions. This pushed the spot prices of 304-grade stainless as assessed by Mysteel to multi-year highs over September 15-22.
As of September 22, the spot price of stainless 304/No.1 5mm hot-rolled coil in Wuxi, in East China’s Jiangsu, had surged to Yuan 20,800/tonne ($3,215.7/t) in-warehouse and including the 13% VAT and hitting a new high since October 13 2011. The price was also higher by a significant Yuan 1,900/t on week.
As of the same day, the spot price of 304/2B 2mm stainless cold-rolled coil in Wuxi had also increased by Yuan 1,900/t on week to Yuan 22,000/t in-warehouse and including the 13% VAT, the highest since May 14 2014, according to Mysteel’s data.
“Most domestic traders hiked their spot offering prices of 304-grade stainless from September 16 after their optimism was buoyed by the deepening curbs in power usage at stainless mills in East and South China,” said a market source based in Shanghai. In fact, the traders’ bullish sentiment grew even stronger afterwards, he said, noting that the sellers continued to hold onto their prices, with most refusing to make transactions at lower prices.
Under the intensified energy restrictions, three of the four stainless producers in Jiangsu had to cut steel output by varying degrees over the past few weeks, Mysteel Global notes. In Guangxi in Southeast China for example, a major stainless mill stopped production from September 16 and will remain stopped till end-month, as reported.
In tandem with the rise in spot prices, stainless futures prices have surged as well, with the most-traded stainless contract on the Shanghai Futures Exchange for October delivery reaching Yuan 21,965/t when the daytime trading session closed on September 22, higher by Yuan 2,635/t or 13.6% from the settlement price on September 15 and a new record high since October 16 2019.
Nevertheless, actual trading volumes have remained average despite the positive market outlook, according to the Shanghai source. “Although stainless prices have been trending upward, end-user demand has yet to recover much. Most buyers are staying rather cautious amid the surging prices, and most inquiries and deals were mainly made between traders,” he said.
Written by Lea Li, liye@mysteel.com
Edited by Russ McCulloch, russ.mcculloch@mysteel.com