SHANGHAI, Jul 31(SMM)- Stainless steel consumption has improved significantly month-on-month in July, but remained weaker than the same period last year. Inventories extended declines, suggesting robust sales in major markets, but remained higher compared to July 2019, according to the recent SMM survey.
Consumption is expected to improve during Q2-Q4, sending the annual growth rate to about -2.6%. Demand form construction, environmental protection and smart home sectors have boosted recovery of stainless steel consumption
On the other hand, heavy rainfalls in South China have weighed on arrivals of cargoes at spot markets as stainless steel drenched by rain will form spots on the surface.
Stainless steel makers in China are recovering from the impact of COVID-19 earlier this year and have returned to normal operations. #300 stainless steel monthly output in the second half of 2020 is likely to surpass the level of the same period last year.
Operating rates at stainless steel makers in China
#300 stainless steel output
Stainless steel makers are expected to keep stable production this year as profits have improved, supporting demand for nickel raw materials. In addition to moderate shipments, high nickel futures prices also bolstered stainless steel prices. With sufficient NPI supply in H2 2020, demand from stainless steel is unlikely to give strong support to nickel prices.