The High Cost of 304 Stainless Steel Makes Profitability Challenging, Limited Downstream Demand Makes It Difficult to Find a Glimmer of Hope [SMM Analysis]

SMM March 28 News,

This week (March 24-28, 2025), both the cost and price of 304 stainless steel cold-rolled coil (CRC) showed an upward trend, but the improvement in profit margin was relatively limited.

In terms of cost, the cost of 3304 stainless steel cold-rolled coil (CRC) continued to rise this week. This may be attributed to the increase in raw material prices and adjustments in production costs, which put significant pressure on producers.

In terms of spot cargo, the price of 304 stainless steel cold-rolled coil increased. Due to the rise in raw material prices, costs provided strong support, and both stainless steel mills and spot traders were optimistic, leading to widespread price adjustments. However, with costs continuing to rise, market prices remained in an inverted state. Given that demand fell short of expectations, downstream companies had low acceptance of high-priced stainless steel products, limiting the transmission of costs to downstream sectors.

In terms of profit, the profit margin of 304 stainless steel cold-rolled coil hovered around -2%, failing to achieve a substantial shift into the profit zone. Mid-week, the profit margin once dropped to -2.4%. Subsequently, thanks to the upward trend in market prices, the profit margin gradually rebounded. As of March 28, the loss narrowed to -1.5%, and operational pressure eased somewhat. However, due to costs fluctuating at highs, price increases were relatively weak, and the profit margin remained unfavorable. The profitability of 304 cold-rolled coil still faces challenges, and it is difficult to reverse the loss trend in the short term. If the imbalance between costs and prices cannot be effectively improved in the future, the profitability dilemma of the cold-rolled coil business may persist.

It is expected that next week, costs will remain high, and downstream demand is unlikely to improve significantly in the short term. Supported by costs, spot prices may show a steady upward trend, but the increase will be limited, and the profit margin will remain unfavorable.

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