SMM, March 14，
This week (March 10–March 14,2025），the 304-series stainless steel cold-rolled market faced severe challenges. The rising ferronickel prices imposed significant cost pressure on the 304 market.
At the beginning of the week, costs were stable at 13,450 yuan/mt, but within just one week, they surged to 13,650 yuan/mt by the weekend. This sharp increase was primarily driven by the continuous rise in the prices of key raw materials, which pushed production costs higher like an unbridled horse. As a result, bullish sentiment in the spot market was fully ignited, reaching unprecedented levels. Spot prices also climbed from an initial 13,300 yuan/mt to 13,420 yuan/mt by the end of the week. However, it is evident that compared to the significant surge in costs, the price increase was relatively minor and limited.
In terms of profitability, the profit margin for 300-series stainless steel stood at -1.3% at the beginning of the week. After a brief rise, it declined further, reaching -1.7% by the weekend, indicating worsening losses. This data clearly shows that the rate of cost increase far outpaced the rate of price growth. Despite multiple price hikes by steel mills in an attempt to alleviate cost pressure, downstream customers showed low acceptance of high-priced products, and purchase transactions fell short of expectations, making it difficult for price increases to be smoothly passed down the supply chain.
Therefore, this week, the surge in the cost of 304-series stainless steel cold-rolled coils was particularly pronounced, while the price increase was negligible in comparison, failing to bridge the significant gap caused by rising costs. Consequently, the sharp decline in profit margins became inevitable. Improvement in profitability depends on a substantial increase in downstream demand.
Next week: Costs are expected to remain high, with hopes for a turnaround in the downstream market.
If you have any questions, please feel free to contact Chaoxing Yang at 13585549799 (same as WeChat).
