SMM Outlook for the Stainless Steel Market

SHANGHAI, May 26 (SMM) - The pandemic situation suppresses the stainless steel terminals demand. From April to May, steel mills have taken measures to reduce production to different degrees, and the downstream companies still purchase on their rigid demand. The in-plant inventory of steel mills is not consumed, and the stainless steel prices remain volatile with some downward potential. According to SMM research, due to the poor demand, a large stainless steel factory in south China plans to reduce the production of 300 series stainless steel by 40,000-50,000 mt in June. In addition, a large steel mill in north China plans to resume normal production in June, and another steel mill in north China is expected to resume normal production in mid-June due to its mid-year maintenance. In June, the expected increment of stainless steel production is limited, and the prices are expected to keep fluctuating in the short term. Only when the downstream demand turns better and the inventory in the stainless steel factory decreases, will there be a significant improvement. In terms of raw materials, when the consumption of stainless steel improves, the pressure on the raw material side will be eased. At present, NPI prices are dropping due to the higher cost and lower profit of steel mills. In the long run, the prices will gradually approach the break-even point, and they will fluctuate and fall. The cost support of stainless steel is weakened by the falling price of raw materials. The turning point of the market depends on the recovery of stainless steel downstream demand.
 

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The above representation and data is based on market information SMM believes to be reliable at the time of acquiring as well as the comprehensive assessment by SMM research team, and any and all information provided in this article is for reference only. This article does not constitute a direct recommendation for investment or any decisions in any form and clients shall act on their own discreet and any decisions made by clients are not within the responsibility of SMM.