Profits on Stainless Steel Narrowed Amid High Costs and Weak Spot Prices

SHANGHAI, May 8 (SMM) - The prices of stainless steel stabilised last week and the inventory accumulated slightly after the holiday due to the weak demand. In addition, the recovery of profits in May may encourage stainless steel plants to increase the production. The cost of the RKEF process stood at around 15,571 yuan/mt, and that of the non-RKEF process was about 15,769 yuan/mt.

In terms of pure nickel, the soaring US dollar index weighed on the SHFE nickel prices. As for NPI, sellers quoted firmly after the holiday while stainless steel mills made some concessions, hence the NPI prices rose slightly. Due to the rising prices of ferrochrome and the weak delivery of traders, the stainless steel scrap prices remained high, leaving its cost efficiency still poor.

To sum up, the costs have stabilised, but the increase in stainless steel output in May will drive up the supply. SMM expects that the profits will thus shrink further this week.