SHANGHAI, Nov 5 (SMM)—Stainless steel futures have fallen 19% until now after hitting a record high of 22,050 yuan/mt on September 22 since its listing. The most-traded SHFE stainless steel contract fell 2.29% to settle at 18,130 yuan/mt yesterday.
According to SMM survey, the inventory in the Foshan market is somewhat surplus from September. The arrivals of goods stabilised as the impact of power rationing has been digested until mid-October. The operating rates at mills were almost flat from September. The actual supply was tight compared with the previous period. Downstream producers and end-users were not active in restocking amid high prices.
The exports are less than Q4. Some traders even reduced orders to 70%. Therefore, this part of cargoes awaits domestic market to consume. According to the trend of previous years, destocking at the end of the year and stockpiling before Chinese New Year is a consistent operation of the market, but traders said that this year is special and they focus on completing the to-be-delivered orders and collecting funds.
Downstream producers held a cautious outlook on restocking amid weak spot and futures transactions and bearish sentiment. Spot market of stainless steel is expected to weaken further.
