Weak Market Conditions Drive Down Stainless Steel Prices and Costs in Tandem, Insufficient Demand Makes It Difficult to Reverse the Inverted Price Situation at Stainless Steel Mills [SMM Analysis]

Published: Oct 31, 2025 17:01

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This week, stainless steel spot prices declined in tandem with production costs, narrowing the losses incurred by stainless steel mills. Taking 304 cold-rolled products as an example, based on the raw material prices of the day, the cash cost decreased by approximately 127.4 yuan/mt, with the loss ratio reaching 5.55%; when calculated using the raw material inventory cost, the cash cost dropped by about 27.2 yuan/mt, and the loss rate remained at 6.43%.

On the nickel-based raw material cost side, high-grade NPI prices continued to trend lower this week, though the pace of decline moderated. Currently, high-grade NPI producers are facing losses, and their willingness to further reduce prices is limited. However, due to weak stainless steel consumer markets and production cuts implemented by stainless steel mills, the downtrend in high-grade NPI prices is unlikely to reverse. As of Friday, prices for high-grade NPI with 10-12% grade fell by 6.5 yuan/mtu, settling at 924 yuan/mtu.

In the stainless steel scrap market, prices remained in the doldrums amid weak stainless steel finished product prices and simultaneous declines in high-grade NPI and high-carbon ferrochrome prices. Additionally, the tight supply of tax invoices persisted. Although stainless steel scrap maintains a clear economic advantage over high-grade NPI, the overall weak market sentiment makes it difficult for scrap prices to recover. As of Friday, prices for 304 off-cuts in east China dropped by 200 yuan/mt, with the latest offer around 9,350 yuan/mt.

On the chrome-based raw material cost side, high-carbon ferrochrome prices fell this week. During the week, Tsingshan announced its November tender price for high-carbon ferrochrome procurement, which held flat MoM at 8,495 yuan/mt (50% metal content). Despite the stable tender price, the spot market for ferrochrome weakened. In October, with ferrochrome producers still maintaining some profits, production willingness was strong, and operating rates remained high, leading to relatively loose market supply. However, downstream stainless steel mills are operating at a loss, and as the stainless steel off-season approaches, several mills have recently announced production cuts, indicating that demand is expected to weaken further, making it difficult for ferrochrome prices to sustain at high levels. As of Friday, prices for high-carbon ferrochrome in Inner Mongolia fell by 125 yuan/mt (50% metal content), settling at 8,275 yuan/mt (50% metal content).

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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