Stainless Steel Futures Drop for Two Consecutive Days amid Poor Demand, Eyes on Power Rationing across China

SHANGHAI, Aug 9 (SMM) - The most-traded stainless steel futures has fallen for two consecutive days after fluctuating sideways for quite some time. It once fell by more than 3% in the day session today, and finally closed the day with a loss of 2.84%.

In the spot market, the average spot price of 304/2B stainless steel (burr edge, in Wuxi) fell 1.22% from yesterday to 16,250 yuan/mt.

The spot prices dropped again, and the transactions were mainly made on rigid demand, while the traders were not interest in building stocks either. Currently, the power rationing over stainless steel mills is mild despite the high temperature, but the eyes shall be kept on the evolution of power rationing across China.

On the cost side, high-grade NPI prices dropped today amid exacerbating oversupply amid continuous NPI capacity commissioning in Indonesia as well as muted demand, and the prices are expected to fall further. Ferrochrome prices were flat as the supply and demand remain poor, and the prices of high-carbon ferrochrome may enter the downward trend. On the whole, the 300-series stainless steel output is expected to rise slightly in August, while the short-term demand is sluggish, hence the spot price has been falling for several days. The stainless steel futures contract is also correcting recently, with market players staying wait-and-see. SMM believes that stainless steel prices are likely to consolidate at a low level with occasional drops.