Stainless steel prices set to benefit from lower cost support in November


Spot stainless steel prices rose slightly in October, with a monthly increase of around 200 yuan/metric ton. Total domestic stainless steel production increased about 9.4% month-over-month, of which 200-series stainless steel production added about 19.8% MoM. After the National Day, spot prices slowly increased. During the second half of the month, steel mills frequently raised their quotations and the market transaction rejoiced, which quickly pushed up spot prices. However, the transmission of the request to the terminal end was not smooth. At the end of October, spot prices slowly declined and traders’ inventories gradually increased. In general, the additional stainless steel production in September was shipped to market. Transactions have improved the MoM, but the growth in demand for terminals has been slower than that of supply. Some mills, traders and terminal companies have been under relatively heavy inventory pressure.

In November, total stainless steel production could increase slightly and most mills will cautiously set their production plans. On the demand side, most terminal companies have replenished some commodities, so they will be buying on rigid demand during the month. Stainless steel may qualify for lower cost support. Buyers and sellers of high quality NPIs will stay in the game and the acceptable price range will narrow slightly. Under nickel ore price support, high-grade NPI prices will fluctuate with some downside potential. Ferrochrome plants will be more willing to resume production amid falling smelting costs. Moreover, with the gradual release of stocks for retail sale, the shortage of spot ferrochrome will ease. High carbon ferrochrome prices are expected to remain stable. November is generally the off season for stainless steel. SMM expects stainless steel prices to remain range-bound with occasional dips in November amid weak supply and demand. The market will be attentive to the evolution of the prices of nickel-based raw materials.
Source: SMM Information & Technology


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