Stainless Steel Products Strengthen, Driving Up Stainless Steel Scrap; Raw Material Economic Advantage Gradually Lost [SMM Analysis]

This week, the prices of 304 stainless steel scrap off-cuts in east China strengthened and rose to 10,000-10,100 yuan/mt, while in Foshan, the prices increased to 9,800-10,100 yuan/mt. Currently, by raw material calculation, the production cost of stainless steel made entirely from stainless steel scrap is approximately 13,890.79 yuan/mt, while that made entirely from high-grade NPI is approximately 13,668.04 yuan/mt. This week, the tax-inclusive purchase price of 304 stainless steel scrap molten steel at a steel mill in south China was 10,100 yuan/mt, up by 100 yuan/mt compared to the previous price.

This week, the strong rise in stainless steel finished product prices alleviated the cost pressure on stainless steel mills, increasing their acceptance of high-priced raw materials. With the significant increase in stainless steel production in March, the demand for stainless steel scrap also grew accordingly, driving procurement prices higher. The supply of stainless steel scrap in the market was already tight, and traders generally held an optimistic outlook for the market, causing prices to continue climbing. However, the rapid rise in stainless steel scrap prices gradually weakened the economic advantage of high-grade NPI as a raw material. Nevertheless, given the overall strength of the market, stainless steel scrap prices are expected to remain high in the short term.