SMM Analysis on China November Stainless Steel Production and December Forecast

According to the SMM survey, the total stainless steel production in China in November 2024 decreased by approximately 0.07% MoM and increased by about 2.98% YoY. The cumulative production grew by 3.33% YoY. Among them, the production of 200-series stainless steel increased by about 3.75% MoM, 300-series increased by about 2.36% MoM, and 400-series decreased by about 13.35% MoM.

Entering the off-season in November, the operating rate of downstream sectors and the order volume of stainless steel mills overall declined. For the 200-series, the stabilization of 200-series prices after a period of decline, coupled with the drop in prices of raw materials such as stainless steel scrap led to the resumption of 200-series stainless steel mills in south China and the switch to 200-series production in southwest China, resulting in a significant increase in 200-series stainless steel production. For the 300-series, due to the high prices of NPI and the weakening of finished product prices in November, the production of small and medium-sized non-integrated stainless steel mills in China saw a certain production reduction. However, large steel mills with integrated cost advantages and ample funds maintained a relatively high operating rate. Notably, a large stainless steel mill in south China added new steelmaking capacity in November, leading to a substantial increase in production. For the 400-series, a stainless steel mill in east China halted 400-series production and switched its capacity to plain carbon steel. Additionally, a large state-owned steel mill in south China reduced 400-series stainless steel production by tens of thousands of mt due to maintenance and the impact of finished product prices, resulting in a significant decline in total 400-series stainless steel production.

Entering December, the downstream demand for stainless steel remains weak due to the off-season. On the raw material side, the prices of NPI, high-carbon ferrochrome, and stainless steel scrap have all seen significant declines. Furthermore, some stainless steel mills may schedule maintenance and production cuts in January. To ensure stable billet supply, they make higher production schedules in December. Overall, it is expected that the 200-series production will decrease by 1.85% MoM in December; for the 300-series, new capacity will continue to ramp up, and with the reduction in costs, the production schedule of stainless steel mills will increase, resulting in a 6.25% MoM growth; for the 400-series, the resumption of 400-series production lines in south China and other stainless steel mills filling the market share of halted mills will lead to an overall production increase of about 10.74% MoM.