Stainless Steel Shipments at Discounts Stimulate Good Transactions, Social Inventory Declines Significantly [SMM Analysis]

As of December 12, SMM stainless steel social inventory stood at 970,200 mt, down approximately 1.05% WoW. Among them, 200-series inventory was 286,500 mt (down 1.51% WoW), 300-series inventory was 543,100 mt (down 0.96% WoW), and 400-series inventory was 140,600 mt (down 0.45% WoW).

Last week, 200-series stainless steel shipments in South China were relatively low overall. Following the previous price decline, prices continued to operate at low levels, and downstream traders were eager to destock. Transactions and shipments were good during the week, with both cold-rolled and hot-rolled products showing significant destocking. Inventory in Wuxi decreased by 0.9%, while Foshan saw a more noticeable decline in cold-rolled product inventory by 2.1%, with an overall decrease of 1.9%.

For the 300-series, arrivals decreased during the week, and recent cold-rolled product arrivals from Indonesia to ports and warehouses were also relatively low. Prices have now fallen to bottom levels, and traders actively offered discounts to stimulate transactions. Cold-rolled product inventory in Wuxi decreased by 1.4%, slightly better than hot-rolled product inventory. In Foshan, arrivals were slightly higher last week, and the degree of destocking was relatively lower, with an overall decrease of 0.7%.

For the 400-series, in mid-month, the settlement resource volume from state-owned stainless steel mills was relatively low. However, downstream buyers held a bearish view on costs and prices, leading to weaker destocking compared to the previous week. Inventory in Wuxi decreased by 0.9%. While Foshan saw an increase in cold-rolled resources, regular hot-rolled resource consumption resulted in destocking, leading to a slight accumulation of 0.5%.