Stainless Steel Prices Fell back, Downward Room Is Limited With Cost Support

SHANGHAI, Nov 1 (SMM) - The futures prices of ferrous sources such as coking coal, coke, and thermal coal all plunged last week, which is expected to drag down the costs of electricity generation.

The SHFE SS 2112 contract fell to the lowest level at 18,300 yuan/mt last week, and then fluctuated around 19,000 yuan/mt. The stainless steel prices were forced down by the falling coal prices and the sluggish spot transactions.

However, the production of stainless steel has not yet recovered, and the output will remain low in the near future. The cost of stainless steel is about 18,500 yuan/mt based on the prices of the raw material inventory, and the cash cost of the stainless steel production in the plants with NPI facilities is about 19,000 yuan/mt based on the intraday raw material prices.

The prices of SS2112 may fall amid the bearish market sentiment, but the downward room is limited around the break-even point. The SS2112 contract is expected to trade between 18,500-19,800 yuan/mt this week.