Stainless Steel Spot Prices Fall under High Inventory Pressure, with Futures Contract Diving More Than 3%

Published: Feb 2, 2023 15:50

Source: SMM

Save

SMM expects that in the short term, the spot prices of stainless steel will be stable or drop slightly under pressure.

SHANGHAI, Feb 2 (SMM) - In the stainless steel spot market, SMM survey shows that the downstream demand rose slowly in the first week after the Chinese New Year (CNY) holiday, but the stainless steel factories have increased the distribution of goods. As a result, the stocks available in the spot market has accumulated significantly. In addition, the vendor managed inventory of stainless steel factories jumped, and the inventory under warrants also expanded to a high level. Therefore, the spot prices trended lower under the pressure of high inventory.

In terms of cost, the NPI prices remained firm within the day, and stainless steel plants started to make inquiries after the CNY holiday. But the high costs have induced strong wait-and-see sentiment in the market. It is thus expected that NPI prices will remain stable in the short term.

The ferrochrome prices have risen slightly today, with sufficient market confidence and the persisting optimism over future demand for chrome ore on low inventory and low port arrivals. Meanwhile, the rising chrome ore prices have further lifted the cost of ferrochrome. In this context, ferrochrome prices are expected to strengthen in the near future.

On the whole, the cost support for stainless steel prices remains firm, while it will still take some time for the terminal demand to improve. The social inventories and in-plant inventories of stainless steel plants have already reached high levels.

SMM expects that in the short term, the spot prices of stainless steel will be stable or drop slightly under pressure, while the futures prices will inch lower.

Spot

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or to learn more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

17 mins ago

[SMM Analysis] Steel Mills Actively Increased Shipments, Coupled With Underlying Rigid Demand, and Stainless Steel Social Inventory Declined Slightly

17 mins ago

21 mins ago

Market Transaction Center Shifted Slightly Downward, with Increased Wait-and-See Sentiment Among Downstream Buyers [SMM Silicone Weekly Review]

[SMM Silicone Weekly Review: The Center of Market Transactions Shifted Slightly Lower, and Downstream Wait-and-See Sentiment Increased] This week, the quotation range for mainstream quotations in China’s silicone DMC market was 13,800-14,300 yuan/mt, down 100 yuan/mt WoW. Overall market trading sentiment remained weak, with increased back-and-forth negotiations between upstream and downstream. As raw material support still persisted, midstream players remained cautious in procurement sentiment, and wait-and-see sentiment in the market was strong.

21 mins ago

23 mins ago

Weak Market Sentiment Weighed on Both Silicon Metal and Polysilicon Prices [SMM Silicon Industry Weekly Review]

[Weak Market Sentiment Weighed on Both Spot Silicon Metal and Polysilicon Prices]: This week, the silicon metal market moved lower after a stalemate, with weak market sentiment, some downstream procurement demand released, and cautious trading sentiment. SMM east China oxygen-blown #553 silicon stood at 9,000-9,200 yuan/mt, down 100 yuan/mt WoW. At the beginning of the week, silicon metal market prices remained in a stalemate, while the most-traded contract fluctuated around 8,550-8,750 yuan/mt, with downstream procurement mainly focused on factory cargoes. Later, affected by macro factors and capital sentiment, futures prices declined continuously and closed at 8,285 yuan/mt on Thursday. As spot-futures traders' price advantages became apparent, shipments increased, downstream procurement sentiment diverged, and the market saw transactions based on immediate needs.

23 mins ago