How Did Stainless Steel Production Change During the Golden March and Silver April? Slight Increase in March, Slight Decrease in April? [SMM Data]

April 1 - According to SMM data, China's stainless steel market production in March 2025 increased significantly, with total production up 19.02% MoM and 12.67% YoY. By product series, production of 200-series, 300-series and 400-series stainless steel rose 14.64%, 19.89% and 22.63% MoM respectively.

Market supply was ample in March. On one hand, the industry had high hopes for the traditional peak demand season of "Golden March and Silver April", which greatly stimulated the production enthusiasm of stainless steel producers. On the other hand, raw material prices remained high for a long time, solidifying the production costs of stainless steel. Under the dual effects, steel mills and spot merchants raised prices, trying to pass on cost pressure to downstream. However, the reality is that downstream demand in March fell far short of expectations, with few new orders. Downstream companies only maintained essential restocking operations and were unable to push prices up significantly. Even though stainless steel prices rose somewhat in March, the overall shipment pace remained slow, inventories stayed high, and the market characteristics of oversupply became more apparent.

Entering April, some stainless steel producers started equipment upgrades and maintenance due to environmental protection emission policy requirements, which affected production to some extent. However, as stainless steel prices continued to rise, companies' losses were effectively alleviated, and some even turned profitable, keeping production enthusiasm at a relatively high level. Notably, as downstream inventories are gradually consumed, the previously sluggish demand is expected to improve, and market demand may see growth opportunities in April.

Overall, stainless steel mill production in April is expected to show a slight decline, down 0.61% MoM but still up 11.87% YoY. By product series, 200-series production will increase slightly by 3.17% MoM, while 300-series and 400-series production will decline 1.89% and 1.98% MoM respectively.

SMM interpretation: In March 2025, stainless steel production hit a new high. However, downstream market demand failed to interact well with the supply side, with scarce new orders. Downstream companies only responded with essential restocking, leading to a lack of demand support for market price increases, slow overall shipment speeds, and increasingly severe inventory buildup. This indicates that the supply-demand imbalance in the stainless steel market was prominent in March. In April, environmental protection emission policies prompted some stainless steel producers to carry out equipment upgrades and maintenance, which to some extent restrained production growth. Destocking and standing firm on quotes may be the themes of April.

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