Wuxi and Foshan Stainless Steel Inventory Slightly Changes: A New Market Landscape Under the Tug-of-War Between Sellers and Buyers [SMM Analysis]

Published: Feb 20, 2025 18:44

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[SMM Analysis: Slight Change in Wuxi and Foshan Stainless Steel Inventory, New Market Dynamics Amid Tug-of-War Between Sellers and Buyers] As of February 20, 2025, SMM data showed that the total stainless steel inventory in the Wuxi and Foshan markets reached 959,000 mt, up 0.88% WoW. Performance varied across series: the 200 series saw a decline in Wuxi and a slight increase in Foshan, while both the 300 and 400 series experienced growth. Over the past year, inventory fluctuations have been driven by supply and demand adjustments. Recent changes stem from uneven recovery paces on the demand side and steel mill production impacting inventory on the supply side. For market participants, inventory presents both pressure and opportunities. The future market will continue to be influenced by macro factors, downstream demand, and raw materials, requiring companies to stay vigilant and adapt flexibly.

On February 20, 2025, Shanghai Metals Market (SMM) released the weekly stainless steel inventory data for the Wuxi and Foshan markets (20250214-20250220).

Overall, the total inventory in Wuxi and Foshan markets showed a slight increase, reaching 959,000 mt, up 0.88% WoW. By series, inventory performance varied:

(1) The 200-series inventory declined. Wuxi's 200-series inventory dropped to 109,300 mt, down 3.36% WoW, while Foshan's 200-series inventory slightly increased to 171,200 mt, up 0.59% WoW. This may indicate relatively stable demand in the 200-series stainless steel market, with some enterprises consuming inventory to meet market demand, leading to a decline in Wuxi's inventory.

(2) The 300-series inventory increased. Wuxi's 300-series inventory reached 344,900 mt, up 1.77% WoW, while Foshan's 300-series inventory rose to 201,700 mt, up 1.97% WoW. The rise in 300-series inventory may be related to the recent production pace of steel mills and the slow release of market demand. Although market demand provided some support, the growth was insufficient to fully absorb the additional production, resulting in inventory accumulation.

(3) The 400-series inventory also increased. Wuxi's 400-series inventory reached 88,100 mt, up 1.03% WoW, while Foshan's 400-series inventory rose to 43,800 mt, up 0.92% WoW. The increase in 400-series stainless steel inventory, widely used in industrial applications, may suggest that demand from related downstream industries has not been fully released, and enterprises remain cautious in stockpiling.

From the inventory trends in Wuxi and Foshan markets, inventory levels have fluctuated over the past year. Recent inventory changes reflect the market's gradual adjustment of the supply-demand balance.

Demand side, although the macroeconomic environment and industry policies have provided some boost to stainless steel demand, the recovery pace of downstream industries varies, leading to uneven demand release. Supply side, steel mills' production plans and output adjustments directly impact inventory levels. Some mills may maintain high production levels based on market expectations, resulting in temporary inventory increases.

From the current inventory situation, on one hand, the inventory increase may bring certain sales pressure, requiring enterprises to strengthen market expansion and adjust marketing strategies to digest inventory. On the other hand, a reasonable inventory level provides a buffer for enterprises to cope with market fluctuations.

For traders, optimizing inventory structure to meet diverse customer needs can enhance market competitiveness. For end-users, stable inventory supply offers relatively consistent raw material support for production planning.

Looking ahead, stainless steel market inventory changes will continue to be influenced by multiple factors. Further improvement in the macroeconomic situation, full recovery of downstream industries, and fluctuations in raw material prices will all impact the supply-demand balance. Enterprises need to closely monitor market dynamics and flexibly adjust production and operational strategies to adapt to the ever-changing market environment.

Click to view SMM stainless steel spot historical prices.
Click to view SMM stainless steel industry chain database.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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