SHANGHAI, June 10 (SMM) - According to SMM survey, the domestic stainless steel output in May totalled about 2.9262 million mt, up 28,800 mt or 1% MoM and down 1.4% YoY. 200 series stainless steel stood at 917,000 mt, up 10.1% YoY; 300 series recorded 1.4506 million mt, down 2.93% YoY; and 400 series was 558,500 mt, down 3.09% YoY.
In May, the supply was more than expected. Although some steel mills reported plans to reduce the production, they decided to maintain the production due to the recovering profits and the decline of pure nickel and NPI prices. Therefore, the output in May increased significantly compared with that in April. In May, and was basically the same as that of the previous year, with an increase of 0.77% YoY. Among them, although the profit of 200 series was squeezed by the low-grade nickel ore, there was still room compared with the 300 series, hence most steel mills continued their production schedule in May, while the output of 300 and 400 series decreased compared with that in April.
In June, although the supply tightness of nickel-based raw materials has eased, the prices are still near the break-even point and the in-plant inventories are high amid the poor consumption. In addition, the supply pressure of the steel mills is still relatively heavy as the production reduction in May was less than expected. Therefore, most steel mills have suspended the production and conducted the mid-year maintenance, hence the overall output will decrease. Some steel mills are still limited by the shortage of raw materials. Since only pure nickel or Feni can be used in the final stage of production, there is still a gap between high-grade Indonesian NPI and Feni. Therefore, in the case of limited supply of Feni, the costs are high amid the unavoidable use of pure nickel. The supply of stainless steel scrap is relatively limited, which will also limit the production of some steel mills with a high proportion of steel scrap in the south. SMM expects that the output of 200, 300, and 400 series will drop slightly in June. It is expected that the 200 series output will be about 897,000 mt with a decrease of 2.19% MoM, and the 300 series output will be about 1,363,900 mt with a decrease of 5.98% MoM, and the 400 series output will be about 519,400 mt with a decrease of 7% MoM.
