According to the SMM survey, the total stainless steel production in China in October 2024 increased by about 2% MoM and decreased by about 0.64% YoY, and cumulative production increased by about 3% YoY. Among them, the production of 200-series stainless steel increased by about 9% MoM, 300-series increased by about 2% MoM, and 400-series decreased by about 9% MoM.
After the National Day holiday in October, favorable macro policies led to a collective rise in the metals sector. Stainless steel prices surged significantly, boosted by nickel products and the real estate ferrous metals series. Market sentiment also drove active trading and purchasing, leading to several weeks of recovery in the stainless steel market, with profits for stainless steel mills improving. Stainless steel mills in south China that had reduced production for maintenance in September showed signs of resuming production in October. Additionally, new capacity in north China gradually ramped up as orders increased in markets such as Hebei and Henan, resulting in a significant increase in 200-series production in October. For the 300-series, although finished product prices rose, high NPI prices after the holiday continued to result in losses. Some integrated stainless steel mills and EAF steel mills with a high proportion of scrap in raw materials increased production, while other small and medium-sized private mills began to reduce production. For the 400-series, the cumulative production this year has increased by about 15% YoY, but the demand growth has not kept pace with production growth, leading to a significant surplus. The lack of motivation for price increases in 400-series products resulted in poor profits. Consequently, a 400-series stainless steel mill in east China ceased production and switched to other products in October, while other mills maintained stable production, leading to a significant reduction in 400-series stainless steel production in October.
Entering November, as macro factors dissipate, futures and spot prices return to fundamentals. With NPI prices remaining firm, the profits for 200 and 300-series stainless steel have once again reached the margin, with some stainless steel mills experiencing deeper losses than in September. Additionally, in November, some stainless steel mills in south China faced power outages and fewer production days, leading to a slight decline in the production schedule for the 300-series. For the 400-series, chrome ore prices and high-carbon ferrochrome bidding and retail prices have dropped significantly, while 400-series prices stabilised; therefore, profits restored. Some mills plan to switch 300-series capacity to 400-series, with a slight increase in 400-series production expected.
