Stainless Steel Prices May Rise Steadily in October

SHANGHAI, Oct 13 (SMM) – The spot prices of stainless steel have been fluctuating widely since September. The prices rose by 1,000 yuan/mt in September, and then increased by 1,000 yuan/mt further after the National Day holiday amid the active market purchase. The prices have stabilised now.

As of October 13, in Wuxi, the price of 304/2B was 21,800 yuan/mt, and the price of 304/NO.1 was 20,400 yuan/mt. In Foshan, the price of 304/2B was 21,650 yuan/mt, and the price of 304/NO.1 was 20,700 yuan/mt.

The power rationing is still strictly implemented across the country. The government has issued new policies set a certain range for electricity price fluctuations in order to promote the marketisation of electricity. The electricity prices has risen in many regions. The electricity prices in Inner Mongolia were raise by 0.2-0.25 yuan/KWh.

The rising electricity price accounts for 20% of the total raw material costs of NPI. As NPI is a raw material of stainless steel, the higher NPI costs will support the stainless steel prices.

The market consumption is thin amid the weak demand. The end producers may suffer losses due to the soaring stainless steel prices. According to the traders, some stores in the end industry are facing high risks due to the losses, but the traders just wait and see the price changes. Amid the high profits of the hot and cold-rolled stainless steel products, the temporary price decline or cost increase will not affect the traders’ quotations.

The 200 and 300-series products are more affected than the 400-series by the dual control of energy consumption. However, the 400-series production is reduced, mainly due to the weaker demand from the downstream automobile exhaust pipe.

The power rationing may extend until the end of the year, and the production of some steel mills is restricted. The dual control of energy consumption weakened the stainless steel supply and demand, but the higher electricity costs and production restrictions are expected to support the stainless steel prices to rise steadily in October.