The stainless steel main company has continued to weaken since January 25, 2023, after hitting a new high of 14,430 yuan/ton, down 1.11% as of 9:13 today, falling for six consecutive days, with a maximum decline of 4.82% in six days. Recently, the average spot price trend of 304/2B volume-raw edge (Wuxi) was relatively stable, and it was flat on January 31 compared with the previous day. SMM expects stainless steel futures to fluctuate sideways in the short term, and the price may run weakly in the case of overcapacity after the Spring Festival.

SMM, February 1: According to SMM research, the fundamentals of stainless steel near the Spring Festival are weak in both supply and demand, and the spot price has been sideways in the past week, but the futures price has fallen sharply.

The stainless steel main company has continued to weaken since January 25, 2023, after hitting a new high of 14,430 yuan/ton, down 1.11% as of 9:13 today, falling for six consecutive days, with a maximum decline of 4.82% in six days.

Recently, the average spot price of SMM304/2B roll-burr (Wuxi) was relatively stable, reported at 14,100 yuan/ton on January 31, unchanged from the previous day. According to SMM research, on January 31, the spot transaction of stainless steel continued to be light, and traders have entered a holiday state. The prices of high-nickel pig iron and high-carbon ferrochrome and scrap stainless steel have been stable recently, and the cost line of stainless steel has remained stable, and the spot price of stainless steel is expected to remain stable in the short term.

Fundamentals:

Supply side: Stainless steel production in January still maintained a high level, stainless steel spot market sales cycle due to the domestic Spring Festival holiday superimposed on the current stainless steel market demand weak or shortened, most stainless steel mills adjust production expectations, is expected to January domestic stainless steel billet output of about 2.903 million tons, a decrease of about 3.71% month-on-month. Among them, the output of 200 series stainless steel was about 722,000 tons, a decrease of about 12.54% from the previous month; The output of 300 series stainless steel was about 1.547 million tons, a decrease of about 3.43% from the previous month; The output of 400 series stainless steel was about 634,000 tons, an increase of about 7.91% from the previous month.

Inventory: Since January, the total inventory of domestic stainless steel by region has rebounded, and the inventory on January 25 was 3,660 tons compared with the previous week, due to the approaching Spring Festival holiday, the demand slowed down. SMM expects that the overall social treasury will maintain a low-speed accumulation trend before the Spring Festival.
Demand side: According to SMM's latest survey, the actual downstream consumption this year is stronger than before the holiday in previous years, and spot resources, especially hot rolling and flat plate are in short supply, and the price difference between cold and hot has narrowed to 200 yuan/ton. In the short term after the Lunar New Year, due to the slowdown in the approval of Indonesian nickel ore quotas and the rhythmic purchase of downstream, the demand may be strong, and the long-term may be weak and volatile. Cost side: According to SMM research, as of January 31, the supply and demand of high-nickel pig iron were weak during the week, and the price of ferronickel fell slightly. It is expected that the output increment of subsequent steel mills will be limited, and the loose supply of ferronickel will be difficult to change, and it is expected that the price of ferronickel will rebound before the Spring Festival with limited space.

Demand side: According to SMM's latest survey, the actual consumption of downstream this year is stronger than that before the holiday in previous years, and spot resources, especially hot rolling and flat plate are in short supply, and the price difference between cold and hot has narrowed to 200 yuan/ton. In the short term after the Lunar New Year, due to the slowdown in the approval of Indonesian nickel ore quotas and the rhythmic purchase of downstream, the demand may be strong, and the long-term may be weak and volatile. Cost side: According to SMM research, as of January 31, the supply and demand of high-nickel pig iron were weak during the week, and the price of ferronickel fell slightly. It is expected that the output increment of subsequent steel mills will be limited, and the loose supply of ferronickel will be difficult to change, and it is expected that the price of ferronickel will rebound before the Spring Festival with limited space.

On the whole, the output of stainless steel on the supply side in January remained at a high level; On the demand side, spot transactions are thin, traders have entered the holiday, and the actual downstream consumption this year is stronger than before the holiday last year, and the social treasury only increased by about 1.97% month-on-month. SMM expects stainless steel futures to fluctuate sideways in the short term, and the price may run weakly in the case of stainless steel overcapacity after the Lunar New Year.