As of June 27, SMM total social inventory of stainless steel was approximately 971,600 mt, up 0.37% MoM but down 1.31% WoW. Among them, the social inventory of 200-series stainless steel was about 272,300 mt, down 0.80% WoW; the social inventory of 300-series stainless steel was about 556,600 mt, down 1.64% WoW; and the social inventory of 400-series stainless steel was about 142,700 mt, down 0.99% WoW.
200-series: Last week, the overall arrivals of 200-series stainless steel were relatively low. The reduction in guidance prices by steel mills led to a wait-and-see sentiment among downstream buyers, resulting in fewer shipments and exacerbating the previously high inventory levels. The destocking for 200-series stainless steel was not ideal last week. Stainless steel inventory decreased by 1.34% WoW in Foshan, while the inventory slightly accumulated by 0.05%WoW in Wuxi.
300-series: Last week, the arrivals of 300-series stainless steel significantly decreased, with destocking observed in both Wuxi and Foshan. The digestion of 300-series stainless steel in Foshan was better. The inventory declined by 2.01% WoW, with HRC inventory down by 2.72% Wow. In Wuxi, HRC inventory dropped by 1.45% WoW, and CRC inventory dropped by 1.18% WoW. According to SMM, a stainless steel mill in East China halted production at one of its bases for several days two weeks ago, leading to the largest reduction in deliveries last week. The production resumption has yet to be confirmed. Meanwhile, a steel mill in South China also reduced shipments to agents last week, resulting in a significant drop in spot supply. Additionally, shipping delays due to weather conditions affected port arrivals in South China.
400-series: Amid arrivals from state-owned steel mills in North China last week, the quantity of 400-series stainless steel was relatively low. After TISCO reduced the guidance price for #430 stainless steel last Monday, the price of 400-series stainless steel, which had been stable for several months, fell, boosting downstream purchasing willingness. Both Wuxi and Foshan saw some shipments.
In summary, during the last week of June, traders actively reduced prices to promote sales and downstream rigid demand still existed, leading to an overall improvement in sales. Supply side, the shipments from stainless steel mills significantly decreased. Therefore, social inventory declined notably last week. Stainless steel production is expected to decrease in July. With future supply reductions, stainless steel social inventory may continue to fall.
