Stainless Steel Prices Dropped Over 3% Yesterday with Heavy Pressure from High Inventory

SHANGHAI, Jun 28 (SMM) – Stainless steel prices kept falling after opening yesterday (June 27), and hit a low at 16,595 yuan/mt since December 2021. The contract recorded a loss of 3.34% to 16,635 yuan/mt as of closing of the day session.

In the spot market, the prices of 304/2B coil (burr edge, in Wuxi) have been falling for three straight day. As of June 27, the prices fell another 2.19% to 17,900 yuan/mt as the traders were willing to surrender their profits for cash. The prices of private 304 cold rolled coil (burr edge, width of 1.33 metre) also dropped below 18,000 yuan/mt.

On the supply and demand side, a large steel mill voluntarily reduced the production in order to contain the losses, and other mills also posted similar considerations. In addition, terminal orders were still muted amid poor demand. The stainless steel inventory was still at a high level, pressuring the prices.

On the cost side, as domestic nickel prices kept falling with pressure from the macro front overseas, the cost support for stainless steel has weakened, but the downward room is limited.

In terms of the futures market, the price is likely to rebound as it has reached the low level. SMM believes that stainless steel prices will still carry downward potential in the near term.