Stainless Steel Prices Fell due to Weak Demand and Power Rationing

SHANGHAI, Aug 19 (SMM) - The prices of ferrous metals generally fell and only thermal coal prices rose. Among them, the most traded stainless steel contract fell rapidly by 3.62% yesterday and once hit the lowest point at 15,120 yuan/mt.

Spot market

The average spot price of 304/2B coil-raw（Wuxi) stood at 15,950 yuan/mt yesterday, down 0.31% from Aug 17. On August 17, the spot prices of stainless steel in Wuxi and Foshan stabilized and fell slightly. The prices of 304 cold and hot rolled coil remained stable; that of 316L hot rolled coil fell slightly. The mainstream quotations of 201 and 430 were flat.

According to SMM analysis, due to the sufficient supply, weak demand and tight power supply in many places, the prices of ferrous metals and the stainless steel futures prices fell. The spot goods supply was sufficient for delivery and the futures prices declined amid the poor market sentiment.

In terms of supply, according to SMM research, at present, the Indonesia cold-rolled coil continues to flow into domestic market. Therefore, the supply of cold-rolled coil will increase in the short term. It is still necessary to continue to pay attention.

In terms of demand, due to the power rationing, the operating rates across many places dell, and the demand cannot be transmitted to the terminal in a short time.

In terms of cost, the prices of high-grade NPI were stable and are expected to fall in the short term. The prices of ferrochrome remained stable. With the second round of coke price hike, and the profits of ferrochrome plants fell further. It is expected that the retail prices of high-carbon ferrochrome will decline before the end of the month. Overall, the market was wait-and-see and SMM believes that stainless steel prices will decline slightly.