Under Cost Pressure, 304 Stainless Steel Cold Rolling Profit Remains Unpromising [SMM Analysis]

SMM March 14 News,

this week (March 10-14, 2025), the 304-series stainless steel cold-rolled market faced severe challenges. The rise in nickel pig iron prices imposed significant cost pressure on the 304 market.

At the beginning of the week, its cost stabilized at 13,450 yuan/mt, but within just one week, it surged to 13,650 yuan/mt by the weekend. This dramatic change was primarily driven by the continuous high-level increase in the prices of major raw materials, which pushed production costs upward like an unbridled horse. As a result, bullish sentiment in the spot market was fully ignited, reaching unprecedented levels. Spot prices also climbed gradually from the initial 13,300 yuan/mt to finally settle at 13,420 yuan/mt. However, it is evident that compared to the sharp rise in costs, the price increase was relatively insignificant.

In terms of profit, the profit margin for 300-series stainless steel stood at -1.3% at the beginning of the week, experienced a brief rise, and then declined, reaching -1.7% by the weekend, with losses becoming increasingly severe. This data clearly indicates that the rate of cost increase far outpaced the rate of price growth. Although steel mills repeatedly raised their quoted prices in an attempt to alleviate cost pressure, downstream customers showed low acceptance of high-priced products, and purchase transactions fell short of expectations, making it difficult for price increases to be smoothly transmitted downstream.

Therefore, this week, the surge in the cost of 304-series stainless steel cold-rolled coils was particularly pronounced, while the price increase was negligible in comparison, unable to bridge the significant gap caused by rising costs. Consequently, the sharp decline in profit margins became an inevitable outcome. Improvement in profits depends on a substantial increase in downstream demand.
Next week: Costs are expected to remain high, with hopes for a turnaround in the downstream market.

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