SHANGHAI, Jun 21 (SMM) – Transactions of stainless steel picked up a bit in the recent three days to Thursday June 20 in Wuxi of Jiangsu province as a rebound in nickel prices bolstered prices of stainless steel and eased pessimism in the market, an SMM survey showed.
However, the higher price failed to spur large-scale stockpiling across downstream consumers. Demand from major downstream sectors will continue to determine prices of stainless steel in the short term.
As of Thursday June 20, prices of stainless steel in Wuxi gained for three straight days, by 50-100 yuan/mt.
SMM data showed that inventories of #300 stainless steel across social warehouses hovered at record highs in April to mid-June. Stocks of #300 series in Wuxi and Foshan registered 330,000 mt as of June 15.
Tepid trades were seen in the stainless steel market in the first half of June, but most producers planned to keep normal operation. SMM learned that the scheduled output of #300 series stood at 1.14 million mt for June.
China aimed to boost the domestic consumption of auto vehicles, home appliances, and consumer electronic goods as it rolled out a two-year stimulus plan on June 3. The plan also highlighted an economy that features environmentally-friendly consumer products.
In the downstream markets, sales of automobiles in May extended their weak performance from April with a greater year-on-year decline, showed data from the China Association of Automobile Manufacturers (CAAM) on Wednesday June 12.
Consumers were cautious ahead of the implementation of stricter national emission standards on July 1, and this could be accounted for the faster decline in sales. Carmakers also slowed down production to ease inventory pressure in May.
Last month, sales of cars came in at 1.91 million units, down 16.4% on the year. The decline expanded from a year-over-year drop of 14.6% in April.
CAAM data also showed that sales of passenger vehicles in May shrank 17.4% on the year, to some 1.56 million units.
Industrial data showed that the floor space of commercial buildings sold also shrank after the traditional high season of March and April. In January-May, the floor space sold decreased by 1.6% from the first five months of 2018.
Prices of new homes across China's first-tier cities such as Beijing, Shanghai, and Guangzhou maintained year-on-year growth in May, while growth in prices of resale homes in the top cities slowed last month, showed data from the National Bureau of Statistics (NBS) on Tuesday June 18.