Stainless Steel Supply and Demand Improvement: 1.08% Destocking of 300-Series [SMM Analysis]

As of October 31, SMM's total social inventory of stainless steel was 989,700 mt, down approximately 0.85% WoW. Among them, the inventory of 200-series stainless steel was 287,900 mt, down approximately 0.29% WoW; the social inventory of 300-series stainless steel was about 561,500 mt, down approximately 1.08% WoW; and the social inventory of 400-series stainless steel was about 140,300 mt, down approximately 1.06% WoW.

200-Series: In late October, the production and shipment arrivals of 200-series stainless steel in South China were relatively large. Downstream purchasing maintained weak rigid demand, but some stainless steel mills in Foshan reduced their supply. In Wuxi, cold-rolled inventory saw a slight buildup, while hot-rolled inventory was more significantly accumulated, with an overall inventory buildup of 0.68%. In Foshan, both cold-rolled and hot-rolled inventories were somewhat digested, with a destocking of 0.91%.

300-Series: Recently, the total arrivals of 300-series were normal. Downstream demand was relatively average at the beginning of the week, and purchasing willingness decreased as prices continued to fall. However, speculative purchasing by traders was quite active. Cold-rolled coil inventory was well digested, while flat products faced inventory buildup pressure. In Wuxi, cold-rolled inventory saw a destocking of 0.88%, and hot-rolled inventory saw a destocking of 0.44%, with an overall destocking of 0.7%. In Foshan, the destocking was more significant, with cold-rolled inventory down 1.41% and hot-rolled inventory down 2.55%, resulting in an overall destocking of 1.64%.

400-Series: Rigid procurement was maintained for the 400-series, but recently, the settlement of pre-allocated resources by stainless steel plants ended, and the distribution volume significantly decreased. In Wuxi, the destocking was 1.02%, and in Foshan, it was 1.13%.

In summary, the recent supply and demand have been relatively stable, with inventory slowly being digested from high levels. The previous shipment volume was relatively small, and next week's port arrivals are expected to tighten. If demand remains stable, it is expected that destocking will continue next week.