Spot supply tightness of #304 stainless steel has not improved, profits of 300 series stainless steel expanded

SHANGHAI, Jun 30 (SMM) — The supply tightness of #304 stainless steel has not improved, and prices of SHFE stainless steel rose rapidly.

Spot prices of cold-rolled stainless steel rose by 500-600 yuan/mt last week, and prices of cold-rolled coil were quoted above 17,000 yuan/mt. Prices of some Yongjin resources stood at around 18,000 yuan/mt.

On #304 hot-rolled products, supply is sufficient, and demand is weak in the off-season, keeping prices relatively stable, with a weekly increase of 100 yuan/mt. Therefore, the current price difference between cold and hot rolled products continues to expand, from 400-600 yuan/mt to 700-800 yuan/mt. The current price difference ensures profits at cold rolling mills using hot-rolled billets. Stainless steel prices are expected to remain strong as the shortage of supply in the market cannot ease in the short term. Market optimism will also push up stainless steel prices.

Based on prices of inventory raw materials and full cost, profits of 300 series stainless steel mills with NPI facilities expanded to 2,300 yuan/mt last week, with a profit margin of 14%, the highest since 2018.

Tight supply of spot cold-rolled resources boosted market sentiment. Stainless steel prices are expected to remain high in the short term, Raw material high-grade NPI prices stand at high levels currently, while traded prices have not risen significantly. Profits of #304 cold-rolled stainless steel will remain at a high level.