Supply growth, poorer demand to affect stainless steel prices in Q4

SHANGHAI, Oct 18 (SMM) – Stainless steel across Chinese markets is likely to face pressure in the last quarter of the year as mills step up production, especially output of #300 series, and as downbeat economic data suggest weakening demand, SMM expects.

Data from the China Association of Automobile Manufacturers (CAAM) showed China’s September production and sales of vehicles decreased 11.7% and 11.6% from the same period last year, respectively.

Residential property sale by floor space dropped some 18% across 30 major cities during the National Day break.

Investment growth in infrastructure, excluding electric power, heat power, gas and water, slowed to 4.2% for January-August, from 5.7% in the first seven months of the year, according to the National Bureau of Statistics (NBS).

In the fourth quarter of the year, output of #300 series is expected to surge 17.7% from the same period last year to stand at 3.93 million mt as mills ramp up production to chase higher profits, SMM data showed. The anticipated growth in output grew concerns among mills about consumption in November-December.

A mill in the east that produced #300 series of stainless steel products has seen lacklustre sales for its billet products, SMM learned. Another mill in the north-west told SMM that orders took a downturn after the National Day break.