In August, China's stainless steel crude steel production increased by 1.58%. Despite a deep decline in finished product prices, it is expected that production will continue to climb in September

according to smm research, the total stainless steel production in china is expected to increase by 1.58% month-on-month in august 2024, while experiencing a year-on-year decline of 1.93%, resulting in a cumulative year-on-year growth of 3.87%. specifically, production of 200 series stainless steel decreased by 2.3% month-on-month, while 300 series production increased by 4.72%. meanwhile, 400 series stainless steel saw a month-on-month decline of 6.71%.

in august, downstream purchasing remained steady due to regular demand. a major steel mill in south china had previously shifted its 300 series capacity to produce the 200 series, but this led to an exacerbation of the oversupply in the 200 series. consequently, prices fell, resulting in losses exceeding those in the 300 series, prompting the mill to revert capacity back to the 300 series. overall, 200 series capacity recovery occurred in august. additionally, some stainless steel maintenance in shandong and two regions in guangxi ended, allowing for the resumption of production in both the 200 and 300 series. with the traditional peak season approaching, many steel mills have plans to increase inventory and production, leading to a noticeable rise in 300 series output. although costs for raw materials like chromium and manganese in the 200 series have slightly decreased, the price drop for finished products has been more significant, compounded by a severe oversupply that has made it difficult for prices to rebound. as a result, 200 series stainless steel mills in south china have made minor price adjustments downward. notably, a new stainless steel capacity in inner mongolia, primarily focused on the 200 series, began producing steel coils in mid-august, currently primarily in a trial production phase. overall, there has been a clear increase in production as stainless steel mills recover capacity and prepare for september.

in early september, expectations for a "golden september" fell short, causing a sharp decline in stainless steel futures and putting downward pressure on spot prices. additionally, a significant outflow of warehouse receipts further intensified the oversupply issue and suppressed new spot transactions. despite severe profit losses across all product lines, stainless steel mills have shown a reluctance to cut production in order to maintain operation levels and market share. some mills even plan to continue increasing production. it is anticipated that total stainless steel production in september will continue to rise, with a month-on-month increase of 1.35%. this includes a 1.28% increase in the 200 series, a 3.03% increase in the 300 series, and a 3.04% decline in the 400 series.