SHANGHAI, Jun. 2 (SMM) -- Mainstream traded prices of EMM were between RMB 14,300-14,400/mt today, and domestic EMM prices temporarily stagnated.
According to SMM survey, producers' unwillingness to move goods was slightly low as current prices made producers profitless given that prices were lower than cost levels. In addition, production suspension for unit maintenance has been repeatedly reported in the market. According to an official an EMM producers with 30kt/yr capacity from Hunan province, 5 or 6 medium and small sized companies had already halted production due to cost pressure, and some large sized producers also halt some production capacity, resulting in gradually reduced supply of EMM. Previously inventories at the above stainless steel producers can be used for two weeks, but current inventories can only be used for one week. In addition, current purchases from the producers can only be used for 2-3 days.
It can be seen that suppliers kept offers firm due to cost pressure as well as gradually reduced supply, but purchases from downstream stainless steel mills were limited due to high inventory pressure. SMM believes that impact from cost will gradually wane as more and more producers having high inventory levels will halt production for maintenance, and impact from significantly reduced demand may make EMM prices slip slightly.
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