SMM Data: Production Cuts Across All Series in January; February Production Expected to Decline, Down 1.30% MoM According to SMM survey data, the total national stainless steel production in January 2024 is estimated to have decreased by approximately 9.32% MoM, while up 3.87% YoY. Specifically, the production of 200-series stainless steel decreased by about 12.38% MoM, 300-series by about 9.33% MoM, and 400-series by about 4.06% MoM.

Today, iron ore futures continued to fluctuate upward. The most-traded I2505 contract finally closed at 803 yuan/mt, up 0.69% for the day. Few offers were made by traders.

[SMM Analysis: Stainless Steel Raw Materials Remain Stable, Profit Margins Slightly Recovered] This week, stainless steel futures prices fluctuated rangebound with a downward trend, while spot prices remained relatively stable. The weekly average price of private 304 cold-rolled stainless steel was 13,150 yuan/mt, up by approximately 120 yuan/mt WoW.

[SMM Analysis: Stainless Steel Spot Prices Remained Stable Before the Holiday, Inventory Buildup Expected Afterward] This week, stainless steel spot prices remained stable, with the market relatively quiet. As of January 24, SMM Wuxi region's 304 cold-rolled coil prices were quoted at 13,000-13,300 yuan/mt, with an average price increase of 120 yuan/mt compared to last week; hot-rolled coil prices were 12,400-12,600 yuan/mt, with the average price unchanged from last week.

[SMM Analysis: Futures Market Fluctuates and Declines, Tariff Policy May Bring Positive Impact] This week, the most-traded SS2503 futures contract showed an overall downward trend. The opening price on Monday was 13,310 yuan/mt, followed by a sharp drop to 12,955 yuan/mt. After a week of fluctuations, it pulled back again to 12,975 yuan/mt on Friday and finally closed at 13,040 yuan/mt.

[SMM Operating Rate of Steel Mills Using Externally Purchased Billets] According to the SMM survey, as of January 24, the operating rate of steel mills using externally purchased billets, which mainly produce construction materials, was 0%, down 25.29 percentage points MoM and 5.71 percentage points YoY.

At the end of January, the market ushered in the traditional Chinese New Year holiday. Currently, downstream end-users have gradually started their holidays, and the market has entered a state of closure. Steel transactions have become mediocre, and overall steel demand has reached a seasonal low.

[SMM Analysis: Stainless Steel Scrap Market Remains Sluggish as Chinese New Year Holiday Approaches] This week, the price of 304 stainless steel scrap off-cuts in east China remained flat at 9,250-9,350 yuan/mt, while in Foshan, the price also stayed unchanged at 9,300-9,600 yuan/mt. Currently, by raw material calculation, the production cost of stainless steel entirely using stainless steel scrap is approximately 13,002.63 yuan/mt, while the cost of production entirely using high-grade NPI is about 13,117.8 yuan/mt. This week, a steel mill in south China did not update its purchasing price for stainless steel scrap...

[Market Activity Significantly Decreases During Chinese New Year, Coke Producers May Continue Inventory Buildup] Coke prices remained stable before the Chinese New Year, and there is an expectation of a price increase after the holiday. However, coking coal prices are also expected to rise, leading to higher coking costs, which will erode part of the profits for coke producers...

According to the SMM survey, as of January 22, the operating rate of blast furnaces at 242 steel mills surveyed by SMM was 85.60%, up 0.46 percentage points WoW. The blast furnace capacity utilisation rate was 87.85%, up 0.87 percentage points WoW. The daily average pig iron production of the sampled steel mills was 2.3641 million mt, up 15,300 mt WoW.