In January, all series experienced production cuts to varying degrees. In February, production is expected to decline, down 1.30% MoM [SMM Data].

According to SMM's survey data, China's total stainless steel production in January 2024 is expected to decrease by approximately 9.32% MoM, while increasing by about 3.87% YoY. Specifically, the production of 200-series stainless steel is expected to drop by around 12.38% MoM, 300-series by about 9.33% MoM, and 400-series by approximately 4.06% MoM. The off-season deepened in January, especially with the approach of the Chinese New Year, leading to an overall decline in downstream operating rates and stainless steel mill orders.

For the 200-series, the sustained high prices of raw materials such as high-silicon SiMn alloy and EMM in late January caused steel mills in all regions, except for a slight production increase in south China, to implement varying degrees of production cuts, resulting in a significant reduction in 200-series production.

For the 300-series, the recovery in NPI prices in January, coupled with weaker finished product prices, allowed large steel mills with integrated cost advantages and sufficient funds to maintain relatively high operating rates. However, domestic small and medium-sized non-integrated stainless steel mills generally reduced production. One mill in east China shifted part of its capacity to the 400-series, reducing its 300-series capacity.

For the 400-series, although large steel mills in east and south China maintained high production levels and operating rates, some small private steel mills implemented production cuts. For instance, a small mill in south China halted production due to the impact of finished product prices, leading to a reduction of 10,000 mt in 400-series production, with the overall trend showing a slight decline.

Looking ahead to February, upstream stainless steel supply is expected to remain high, with the market supply and demand still weak. Prices of raw materials such as NPI, high-carbon ferrochrome, and stainless steel scrap are likely to remain stable. Some stainless steel mills may complete maintenance and resume production after the Chinese New Year. Overall, 200-series production is expected to increase by 2.71% MoM in February. For the 300-series, due to high arrivals before the holiday and relatively small production cuts by mills before the holiday, production is expected to decrease again by 2.36% MoM. For the 400-series, high raw material prices and shorter operating times are expected to result in a slow recovery of capacity, with production expected to decrease by approximately 4.42% MoM.

SMM's national production statistics sample includes 36 companies: Dingxin Industry, Qingtuo Nickel, Qingtuo Industry, Tsingshan Steel, Guangqing Metal Technology, TISCO Stainless, Shandong Xinhai, Jiangsu Delong (including the Dainan Project, Xiangshui Phase II, Liyang, and Zhongtuo New Materials), Beibu Gulf New Materials (Beihai Chengde), Angang Lianzhong, JISCO, Taishan Steel, Dongfang Special Steel, Xinjinhui, Baosteel Desheng, Fujian Wuhang, Fuxin Special Steel, Inner Mongolia Shangtai, Yantai Huaxin, Huale Alloy, Yongxing Special Steel, Shandong Shengyang Jinhui, Guangxi Jinhai, Liuzhou Steel Zhongjin, Guangxi Yongda, Guangxi Xinfeng, Shizong Wolide, Shenyuan Special Steel, Youyi Special Steel, Sichuan Gangchen, Taizhou Huadi, Ningbo Dongmeng, Jiangxi Shengda, and Ningbo Yiyue.