【SMM Analysis：EMM Supply Surplus, Prices Running Weak】

【SMM Analysis：EMM Supply Surplus, Prices Running Weak】In July 2024, the domestic spot average price of EMM (main production areas) was 13,160.87 yuan/mt, down 2.59% MoM. The FOB monthly average price of EMM was $1,850.87/mt, down 1.93% MoM. Supply side, the overall production of major EMM plants remained stable. Additionally, EMM plants in Hunan and Yunnan, which had previously halted production, resumed operations, leading to a slight increase in overall EMM production in July. Demand side, the total production of stainless steel showed a decreasing trend in July, with cautious procurement of EMM and low acceptance of high-priced EMM. In summary, the EMM market experienced an intensified supply surplus in July, resulting in weak price performance. Entering August 2024, EMM prices are expected to continue running weak. On one hand, although EMM plants slightly reduced production, the overall production level remained high, coupled with inventory accumulation, leading to a persistent supply surplus. On the other hand, due to the expected profit losses of stainless steel plants, it is difficult for them to increase production in the short term, resulting in continued weak demand for EMM. In summary, the price outlook for EMM is expected to remain weak. In terms of exports, according to SMM, the price gap between domestic and overseas EMM gradually narrowed in July, reducing the purchasing enthusiasm of overseas steel plants. Additionally, due to high temperatures and summer holidays in July, many overseas steel plants shut down for maintenance, leading to decreased demand for EMM from downstream steel plants. Considering the continuation of summer holidays overseas, the purchasing enthusiasm for EMM from steel plants remains weak, and the export price outlook for EMM is expected to decline slightly.