This week, stainless steel spot prices continued to decline, with both the high and low prices of 304 cold-rolled showing varying degrees of downward adjustment WoW [SMM Analysis].

This week, stainless steel spot prices continued to decline, with 304 CRC prices showing varying degrees of downward adjustment compared to last week. As of January 3, SMM Wuxi region's 304 CRC was quoted at 12,850-13,000 yuan/mt, and HRC prices were at 12,300-12,500 yuan/mt. Among them, 304 CRC decreased by 150 yuan/mt, and 304 HRC decreased by 50 yuan/mt. In December, stainless steel production overall showed a significant increase, mainly reflected in the 400-series stainless steel. The primary reason was the temporary tight supply of 400-series stainless steel after a stainless steel mill in east China halted production in October. Entering the off-season at the end of Q4 and under the backdrop of a sharp decline in ferrochrome tender prices, the overall price performance of the 400-series remained relatively stable. The market demand gap for stainless steel such as 430 urgently needs to be filled, with cost and profit recovering upward. Entering January 2025, stainless steel finished product prices and downstream demand have essentially dropped to a freezing point. On the raw material side, NPI and high-carbon ferrochrome prices recently stabilized after declining. Losses in stainless steel finished product profits intensified. Coupled with the Chinese New Year holiday arrangements at the end of January, the overall operating rate and production schedule of stainless steel mills are expected to decline significantly. A short-process stainless steel mill in south China is expected to halt production for maintenance starting January 1 for approximately 1.5 months, potentially affecting total production by about 120,000 mt. Stainless steel total production in January 2025 is expected to decrease by 8.53% MoM, with 200-series down 8.05%, 300-series down 8.98%, and 400-series down 7.9%. Stainless steel prices in January are expected to remain low and relatively stable.

Affected by the decline in futures prices, stainless steel prices saw a significant drop this week. The weekly average price of private 304 CRC was 13,018 yuan/mt, down approximately 90 yuan/mt WoW. This week, 304 CRC finished product prices continued to decline with a "two-step drop," as downstream demand weakened further and destocking sentiment in the market became evident. Some shipments arrived at a steel mill in east China. The integrated nickel cost was approximately 1,024.33 yuan/mtu, ferrochrome prices remained stable, and stainless steel scrap prices were adjusted downward again before the New Year, with a decrease of 50 yuan/mt. The integrated raw material cash cost on the day was approximately 13,617 yuan/mt. If settled at the stainless steel mill price of 12,950 yuan/mt, the cash cost loss was nearly 4.9%, and the full cost loss was 9.04%. Stainless steel finished product prices are expected to continue to weaken slightly next week.

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