SHANGHAI, May 9 (SMM) - Chinese stainless steel output totalled 2.78 million mt in April, up 1.81% MoM but down 4.05% YoY. In detail, the output of 200-series stainless steel dipped 3.67% on the month to 839,000 mt, that of the 300-series gained 5.28% to 1.43 million mt, and that of the 400-series stood at about 508,600 mt, up 1.92% MoM.
Many stainless steel mills that cut their output resumed the 300-series stainless steel production on the decline in their in-plant stainless steel stocks and more importantly, the rapidly growing profit margins contributed by the rallying spot stainless steel prices amid the rebound in NPI prices in early April. There were also stainless steel mills that increased their production due to more 300-series contracts signed in May and a smooth ramp-up of production capacity. On the contrary, the 200-series orders received by the stainless steel mills were average, and the in-plant inventory dropped relatively slowly, resulting in an MoM decrease in its output. The output of the 400-series was the same as the previous month.
In May, the total output of steel billets in Chinese stainless steel mills may hit a record high, which will be contributed by the new production capacity of 300-series and 400-series in a large mill in east China and the production increase in 300-series in some stainless steel mills. Besides, the 200-series stainless steel output will also grow somewhat with the end of the maintenance carried out by another stainless steel mill in east China. As of the beginning of May, the stainless steel social inventory rose only slightly, but SMM believes that in mid-to-late May, the market will see a large inflow of spot stainless steel produced in April. And there will be a large supply surplus in June. In the absence of a significant recovery in demand, the overall stainless steel inventory may rise to a certain extent, curbing the spot prices from rising.
