SHANGHAI, Jun. 2 (SMM) –
Forecast for June:
Operating rates at major EMM producing regions will remain high in June as EMM output in Guangxi and Chongqing will continue to increase, despite a slight decline in output in Hunan and Guizhou. #200 stainless steel producers will purchase only limited amount of EMM against depressed stainless steel industry. EMM exports should show no signs of improvement, either. Given the existing severe oversupply, SMM expects EMM prices to drop further. A growing number of EMM producers in Hunan and Guizhou will be forced to halt production due to weaker competitiveness. EMM prices will not show any improvement until operating rates at major producing regions begin to fall. In this context, SMM expects EMM prices to average RMB 12,700/mt in domestic market in June and USD 2,130/mt for export prices.
Forecast for Next Week:
Major stainless steel producers will not be in a hurry to purchase EMM and will try to press for lower input costs against sluggish stainless steel markets. Operating rates at major EMM producing regions are as high as 50%, keeping supply in surplus. Some EMM producers will be more willing to sell at below costs against tight liquidity. SMM thus predicts that EMM prices will slip to RMB 12,500/mt in the coming week.