In early April, stainless steel prices extended declines. Some stainless steel mills were scheduled to cut production in April amid losses and ferronickel shortages. However, in mid-April, as terminal demand for stainless steel recovered, 200 and 300- series stainless steel prices rose largely, backed by fewer stainless steel arrivals and tight nickel ore supply. Due to improved profits and growing downstream orders, steel mills cut less production than expected, especially those in East China. A steel mill in Zhejiang restored 20,000 mt of 300-series stainless steel capacity in early April, and one in Jiangsu dramatically ramped up production by upgrading production lines. Due to strong consumption of 400-series stainless steel in March and April, steel mills switched to 400-series stainless steel production lines, involving 40,000 mt of capacity. Affected by raw materials, the output of Indonesian stainless steel decreased by about 80,000 mt, and is expected to continue to fall in May.
In May, social inventory accumulated again after the holiday. Stainless steel transactions were bleak amid weakening downstream demand and rising high-grade NPI prices. However, growing costs provided strengthening support for stainless steel prices. Therefore, short-term stainless steel prices may hold stable. Nevertheless, stainless steel mills still increase production schedules. It is expected that the domestic stainless steel output will increase by 9.18% MoM, with 300-series stainless steel production up about 90,000 mt. A stainless steel mill in Central China is expected to restart in mid-May, bringing 20,000 mt output of 200-series stainless steel. The output of 400-series stainless steel is estimated to decrease due to escalating losses caused by growing high-carbon ferrochrome prices.
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