Stainless Steel Scrap Market Faces Weak Supply and Demand, Pre-Holiday Price Slump Unlikely to Change [SMM Analysis]

This week, the price of 304 stainless steel scrap off-cuts in east China remained stable at 9,250-9,350 yuan/mt, while in Foshan, the price also remained stable at 9,300-9,500 yuan/mt. Currently, by raw material calculation, the production cost of stainless steel entirely using stainless steel scrap is approximately 13,002.63 yuan/mt, while the cost using only high-grade NPI is about 13,036.41 yuan/mt. This week, a steel mill in south China did not update its purchasing price for stainless steel scrap. Stainless steel finished products and high-grade NPI prices showed weakness this week. However, as prices are already at relatively low levels, further declines face resistance, with downward momentum weakening and limited price drops. As the Chinese New Year holiday approaches, the operating rate of some stainless steel processing plants has decreased, leading to reduced supply of stainless steel scrap off-cuts and continued market tightness. Currently, stainless steel scrap is slightly more economical than high-grade NPI. However, with the market's growing anticipation of the full implementation of the "reverse invoicing" policy, the industry generally maintains relatively low prices for stainless steel scrap to reserve sufficient tax space. Additionally, annual maintenance at stainless steel mills in January has resulted in production cuts, further weakening demand for stainless steel scrap. In the short term, stainless steel scrap prices are expected to remain sluggish.