SMM research shows China's November 2023 stainless steel output at 3.0085 million mt, down 4.16% MoM but up 3.91% YoY. The 200 series production was 914,000 mt, down 6.97% MoM; the 300 series was 1.4485 million mt, down 1.56% MoM; and the 400 series was 646,000 mt, down 4.16% MoM. Meanwhile, Indonesia's output was 405,000 mt, up 3.7% MoM and 35.29% YoY. The supply-demand imbalance for stainless steel eased a little in November thanks to October's production cuts. But supply surplus weighed down stainless steel price, which led to losses for mills, prompting year-end strategic maintenance and output reductions, especially in South China for the 200 and 300 series.
Indonesian stainless steel plants boosted production, leveraging lower raw material costs and restarting semi-finished product lines like billets. While China's November production fell, Indonesian stainless steel flowed into the Chinese market, thus the oversupply persisted.
A South China stainless steel mill plans to restart production early due to order backlogs. While the social stockpiles have seen some inventory reduction, levels are still high YoY. In terms of raw materials, November saw high-grade NPI prices stabilize after consecutive drops. Due to oversupply and more Indonesian production, NPI costs for stainless steel mills have fallen since October, easing mill losses. Thus, most mills will likely sustain production. However, some East and North China mills are cutting back, and a South China special steel mill facing significant losses may stop production in December, potentially impacting tens of thousands of mt of 400 -series stainless steel output.
In summary, production resumption after maintenance and high Indonesian output indicate sustained ample supply.
