SHANGHAI, Jan 16 (SMM) - In the first half of January, the stainless steel market remained poor. The transaction of 200 series stainless steel was relatively light, and the export orders were also sluggish. However, some stainless steel factories stopped providing goods to the the market since the New Year's Day, hence the spot supply weakened and the inventory accumulation rate decreased significantly in the first half of the month. The new orders for the 300 series stainless steel were few, and the downstream enterprises had weak demand. But the market was more optimistic about the post-holiday demand, and thus the post-holiday orders were relatively good. In addition, the delivery of stainless steel plants slowed down, and the market also controlled the inventory in advance. Therefore, there was inventory pressure of 300 series stainless steel was ease before the CNY holiday. The inventory of 400 series stainless steel continued to decline slightly, and the spot supply of 430 CRC was still relatively scarce. To sum up, the pre-holiday restocking demand of downstream enterprises was weak, and stainless steel factories reduced the supply. Under the weak supply and demand, the spot prices declined and stabilised. As such, the overall inventory accumulated slightly.
In the second half of January, supply and demand may increase simultaneously. According to SMM research, the market is generally optimistic about the post-holiday market and most stainless steel factories will release the supply after the CNY holiday. With the recovery of terminal demand, downstream enterprises may purchase intensively. Therefore, SMM expects that the spot prices of stainless steel will run strongly in the second half of January. The social inventory may accumulate greatly in the short term amid the increasing supply and demand.
As January 15, the total social inventory of stainless steel was about 683,700 mt, up 3.09% on the month and 0.75% on the 15-day basis. The inventory of 200 series stainless steel increased 6.03% on the month and 0.98% on the 15-day basis; the 300 series increased 4.68% and 1.60%; the 400 series decreased 6.60% and 2.79%.
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