Narrow Destocking of Stainless Steel Inventory, Spot Prices Rise as Raw Materials Strengthen [SMM Analysis]

This week, stainless steel spot prices were continuously adjusted upward, following the upward trend of electronic trading. As of January 17, SMM Wuxi region's 304 cold-rolled coil was quoted at 12,900-13,200 yuan/mt, with an average price up 120 yuan/mt WoW. Hot-rolled prices were at 12,400-12,600 yuan/mt, with an average price up 60 yuan/mt WoW.

In terms of supply, as the Chinese New Year approaches, some steel mills in east and south China have gradually implemented production maintenance plans. Among them, stainless steel mills in south China plan to suspend steelmaking and rolling during the Chinese New Year break around January 22, with production expected to resume around February 10. Additionally, a steel mill in the southeast coastal region plans to shut down its No. 3 blast furnace for maintenance on December 20, 2024, with production expected to restart in early February.

This week, stainless steel social inventory decreased by 0.75% WoW. Specifically, Wuxi region's 200-series inventory fell by 0.67%, 300-series by 0.26%, and 400-series by 0.8%; Foshan region's 200-series inventory dropped by 1.30%, 300-series by 1.07%, and 400-series by 0.9%.

On the demand side, as the holiday approaches and the Chinese New Year atmosphere intensifies, market transactions were sluggish, and shipments remained at low levels. Some traders have started restocking to prepare in advance. In terms of raw material prices, NPI, high-carbon ferrochrome, and EMM began to rebound this week, with initial support from raw materials becoming evident. It is expected that before the Chinese New Year, due to macro factors, shipments will remain at low levels, and prices may continue to stay firm.

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