Stainless Steel Scrap Prices Hold Steady, Economic Advantage Narrows [[SMM Analysis]]

This week, the price of 304 stainless steel scrap off-cuts in east China remained stable, reaching RMB 9,600-9,700/mt; in Foshan, the price of 304 stainless steel scrap off-cuts also remained stable, reaching RMB 9,400-9,700/mt. Currently, calculated by raw material, the production cost of stainless steel produced entirely from stainless steel scrap is approximately RMB 13,417.11/mt, while the production cost of stainless steel produced entirely from high-grade NPI is approximately RMB 13,655.96/mt. This week, a steel mill in south China did not update its procurement price for stainless steel scrap.

This week, the prices of stainless steel finished products, high-grade NPI, and high-carbon ferrochrome were generally in the doldrums, but the range of fluctuations significantly narrowed compared to the previous period, while the price of stainless steel scrap remained stable. Currently, due to significant losses in finished product prices, stainless steel mills are cautious about raw material procurement. Although stainless steel scrap still has cost advantages over high-grade NPI, this advantage is gradually narrowing. Even when using stainless steel scrap as a raw material, stainless steel mills are on the verge of incurring losses. From the supply side, the extent of production cuts by stainless steel mills in April was limited. It is expected that the production strategy in May will focus on adjusting production among different steel grades, with limited overall production decline. Under this background, the demand for stainless steel scrap remains at a certain level. However, due to the continuous pressure of losses faced by stainless steel mills, they have a strong desire to bargain down prices of raw materials. Based on a comprehensive assessment, stainless steel prices may remain relatively stable in the short term, but the subsequent trend still requires close attention to the actual performance of the downstream consumer market.