SHANGHAI, Aug 4 (SMM) - Stainless steel futures prices continued to rise in July. As of July 30, the most traded stainless steel contract closed at 19,995 yuan/mt, an increase of 3,165 yuan/mt or 18.8% from the end of June. However, the prices fell sharply in the first two trading days in August.
Spot prices of stainless steel kept hitting record highs in July. SMM price of 304/2B coil-raw edge (Wuxi) averaged 20,550 yuan/mt on July 30, up 17.77% from the 17,450 yuan/mt at the end of June.
The cost of raw materials increased in July, due to the tight supply of NPI and ferrochrome. Ferrochrome output was limited amid the power curtailment in Inner Mongolia, Hunan, Guangxi, and other regions. The output in Inner Mongolia was nearly halved.
Spot supply was tight as well, and the resource replenishment was scarce in the short term, leading to the low inventories in downstream industries. At the same time, nickel futures kept rising to drive up the prices of stainless steel futures and spots.
Stainless steel futures fell back after hitting a new high on August 2. In the spot market, some traders slightly lowered the prices of 304 cold-rolled products due to the downward futures on August 3.
According to traders, the market supply was still tight. Tens of tons of resources from Delong arrived every day, but there were some previously booked spots to be delivered. The price decline in the spots was not obvious amid the tight supply and low inventories. At the end of July, the total inventory of the 300 series stainless steel fell below 400,000 mt, the lowest level since 2020.
Under the prevention and controls of the recent domestic pandemic, 22 expressway toll station have been closed in Nanjing, Taizhou, Yangzhou, Nantong, and Suzhou. The transportation and delivery is impeded in Wuxi, but the overall impact was little, with slight delay in the delivery.
It is expected that stainless steel will still fluctuate at high levels in August.
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