As of August 1, SMM total social inventory of stainless steel stood at 964,100 mt, down 1.05% MoM and 1.31% WoW. Among them, the inventory of 200-series stainless steel was 278,100 mt, up 0.75% WoW and about 3.29% MoM; the inventory of 300-series stainless steel was 546,300 mt, down 2.22% WoW and 3.08% MoM; the inventory of 400-series stainless steel was 139,600 mt, down 1.72% WoW and 1.22% MoM.
200-Series: Last week, overall arrivals decreased compared to previous weeks, but the previous accumulation of spot goods was severe, and downstream transactions were weak, making it difficult to digest social inventory. Some steel mills in south China reduced shipments last week, and the market transaction atmosphere was relatively good, leading to a slight destocking of #201 stainless steel in Wuxi. In Foshan, arrivals were relatively high last week, and downstream willingness to purchase was low, resulting in an overall inventory increase of 1.16%.
300-Series: Last week, the 300-series stainless steel futures market was relatively strong, and spot transactions were good, mostly among traders, while downstream consumption was mediocre. Arrivals in Wuxi remained low, mainly due to a large steel mill selling warrants. Therefore, CRC inventory saw a significant drop of 2.78%. HRC resources were tight, and downstream demand was cautious, resulting in a destocking of 1.77%. In Foshan, CRC was well digested last week, while HRC arrivals were high. Therefore, CRC destocked by 2.25% and HRC destocked by 0.85%.
400-Series: Last week, most state-owned steel mills were in the settlement period, leading to reduced arrivals, and 400-series stainless steel was mostly in rigid demand. Therefore, 400-series stainless steel inventory in both Wuxi and Foshan decreased, with a drop of 1.57% in Wuxi and 2.09% in Foshan.
Recently, a large number of short positions in stainless steel have been closed, leading to a significant drop in 300-series CRC inventory, consistent with the logic of steel mills switching from 300-series stainless steel production to 200-series production. The scheduled production of 300-series stainless steel in August still shows an upward trend, but downstream demand has not shown signs of synchronous growth. A large number of warrants flowed out, maintaining the actual circulating resources, which will also affect the speed of original inventory digestion. It is expected that the overall stainless steel inventory will slowly accumulate in August.
