Stainless steel social inventory rose by 0.82% WoW last week, with a significant accumulation in Wuxi [SMM Analysis]

As of June 13, SMM total social inventory of stainless steel was approximately 968,400 mt, up 2.43% MoM and 0.82% WoW. Among them, the social inventory of 200-series stainless steel was about 273,400 mt, up 1.02% WoW; the social inventory of 300-series stainless steel was about 566,600 mt, up 0.62% WoW; and the social inventory of 400-series stainless steel was about 142,800 mt, up 1.24% WoW.

200-series: Last week, the arrivals of 200-series stainless steel remained high, with resources in Wuxi and Foshan mainly from Hongwang CRC. However, the market atmosphere was poor, leading to weak transactions of 200-series. In Wuxi, CRC inventory increased by 1.2% WoW and HRC inventory increased by 0.69% WoW. In Foshan, CRC inventory increased by 1.34% WoW and HRC inventory increased by 1.96% WoW.

300-series: Last week, the 300-series stainless steel continued to see a slight inventory accumulation, but there was a significant difference in inventory changes between Wuxi and Foshan. In Wuxi, the arrivals of 300-series CRC were large, with CRC inventory increasing by 2.22% WoW, while HRC inventory increased by 0.69% WoW due to fewer arrivals and some discounted shipments from steel mills. In Foshan, the arrivals were fewer, and the non-futures CRC inventory in public warehouses decreased WoW, with CRC inventory down 1.66% WoW. However, the HRC arrivals were normal and shipments were poor, the inventory increased significantly by 3.25% WoW.

400-series: Last week, there were concentrated arrivals of 400-series stainless steel, mainly from North China to Wuxi, with CRC inventory increasing by 1.53% WoW and HRC inventory increasing by 1.06% WoW. In Foshan, 400-series CRC had not yet entered the warehouses and was normally digested last week, seeing an inventory reduction of 0.49% WoW. With more HRC shipments from South China, HRC inventory increased by 4.28% WoW.

In summary, the overall stainless steel prices declined last week. Transactions were weak, and overall shipments were poor. The decrease in 300-series CRC inventory in Foshan was mainly due to reduced supply, but there were some resources in transit. It is expected that the reduction of stainless steel social inventory will be limited in the short term. The inventory will be digested slowly or accumulate slightly.