Stainless Steel and High-Grade NPI Markets Rebound, Stainless Steel Scrap Prices Are Expected to Strengthen [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 held steady at 9,300-9,600 yuan/mt. Currently, based on raw material calculations, the production cost of stainless steel using only stainless steel scrap is approximately 13,002.63 yuan/mt, while using only high-grade NPI is around 13,093.31 yuan/mt. This week, a steel mill in south China did not update its purchasing price for stainless steel scrap. The stainless steel and nickel futures markets performed strongly this week, with prices of stainless steel finished products and high-grade NPI rebounding, leading to a recovery in steel mill profits. This has weakened previous expectations for production cuts and improved demand expectations for stainless steel scrap. As the Chinese New Year holiday approaches, some downstream end-user enterprises have already closed for the holiday, resulting in reduced trading activity in the stainless steel scrap market. Most traders are focusing on maintaining prices before the holiday, with no significant adjustments expected. Currently, the economic advantage of stainless steel scrap over high-grade NPI is gradually expanding. Coupled with the recovery in steel mill profits and the weakening of production cut expectations, stainless steel scrap prices are expected to remain firm in the short term, with little likelihood of a decline.