Stainless Output may Affected by High Inventory and Substantive Terminal Demand

SHANGHAI, Feb 9 (SMM) - According to SMM survey, the stainless steel output was 2.34 million mt in January, down 18.48% MoM but up 1.59% YoY. The output of 200-series stainless steel fell 17% MoM to 667,000 mt, 300-series dropped 4.5% MoM to 1.28 million mt, and 400-series declined 8% MoM to 399,000 mt.

The sharp output cut was related to the annual large-scale maintenance carried out by many stainless steel mills. The weak pre-holiday demand and the fewer production days in January, the orders received by stainless steel mills were poor. As such, the output of 200-series stainless steel declined sharply and that of 300-series also fell slightly. At the same time, the high ferrochrome prices in December also led to output cut of 400-series stainless steel.

In February, the total output of stainless steel may increase to a certain extent as most stainless steel mills plan to resume the production amid positive market outlook on demand. Some large-sized stainless steel mills may schedule the production cautiously due to tight raw material supply. It is still necessary to pay attention to the digestion of high inventory and the substantive recovery of terminal demand.

To sum up, SMM believes that the prices of stainless steel may stabilise in February.