Stainless steel scrap prices follow the decline in finished steel prices, and economic advantages re-emerge [SMM Weekly Review of Stainless Steel Scrap Market]

This week, prices of 304 stainless steel scrap off-cuts in east China pulled back to 9,450-9,550 yuan/mt, while those in Foshan pulled back to 9,300-9,600 yuan/mt. Currently, when calculated by raw material, the production cost of stainless steel produced entirely from stainless steel scrap is approximately 13,239.47 yuan/mt, while that produced entirely from high-grade NPI is approximately 13,270.41 yuan/mt. This week, a steel mill in south China lowered its purchase price for stainless steel scrap. As of June 13, the tax-inclusive purchase price for 304 molten stainless steel reached 8,963 yuan/mt.

This week, stainless steel finished product prices continued to decline. High-grade NPI prices ended their previous upward trend and pulled back, while stainless steel scrap prices followed suit and weakened amid market pessimism. Currently, stainless steel has entered the traditional consumption off-season, with weak end-use demand leading to a continuous accumulation of steel mill inventories, making it difficult to sustain previous price-limiting strategies. However, after the cancellation of price limits, the situation of losses for enterprises has further intensified, and expectations for production cuts at steel mills have risen. Despite the fact that the supply of stainless steel scrap is not abundant, the combination of weakening demand and cost pressure on steel mills has exerted downward pressure on stainless steel scrap prices. Although the economic advantage of stainless steel scrap over high-grade NPI has re-emerged, its advantage is relatively limited due to the simultaneous weakening of high-grade NPI prices. Overall, it is expected that stainless steel scrap prices will continue to remain in the doldrums in the short term.