SHANGHAI, Jun. 15 (SMM) – According to the latest SMM survey of major domestic #200 stainless steel mills, they cannot give concrete output data for June. However, Fujian Wuhang Stainless Steel Products Co., Ltd., Qingyuan Qingshan Stainless Steel Co., Ltd., Lianzhong Stainless Steel Corporation, Inner Mongolia Huaye Special Steel Co., Ltd., Dongyi (fogang) Special Steel Product Co., Ltd., and China Southeast Special Steels Group reported slight MoM drops in their output in June. Besides, most of these mills are pessimistic over stainless steel markets during July in the face of continuously sluggish orders. Inner Mongolia Huaye Special Steel Co., Ltd. will conduct maintainance during July and will thus cut their EMM purchase volume to 600 mt in July from the previous monthly level 1,200 mt.

On the EMM supply side, the average operating rate at major domestic EMM producers remains around 46% this week. Despite subsidy policy for electricity prices in Guangxi (for producers whose electricity use higher in June than April), most EMM producers still had little interest in production given the sluggish market. Operating rate at producers in Chongqing's Xiushan is also only around 50% (output roughly at 10,000 mt/month) in the face of slack market demand. Operating rate at producers in Guizhou, Hubei, and Ningxia remains unchanged this week.

On the cost side, SMM estimates that the production cost for EMM producers should be between RMB 14,500-14,700/mt at present, down by RMB 100-200/mt as recent selenium dioxide prices have fallen continuously.

Overall EMM supply still exceeds demand, while support from production costs is falling further. As such, SMM expects that domestic EMM prices will edge down to around RMB 14,600/mt in the coming week.