[Supply] The production of 300 series stainless steel in 41 domestic steel mills was 1.5827 million mt in February, an increase of 15.9% from the previous month. Production scheduled in Indonesia is estimated at 289,000 mt in February, up 2% on the month.
[Demand] Demand after the Chinese New Year holidays is lower than expected, and demand will take time to recover. But market optimism still exist.
[Cost, profit] Calculated based on the real-time raw material purchase price, the cost of the steel mill is about 17,300 yuan/mt. Based on NPI prices produced with spot ore, the cost is about 16,600 yuan/mt.
[Inventory] On February 16, the total 300 series inventory in Wuxi and Foshan was 723,300 mt, an increase of 5,300 mt week-on-week. Warrants have soared to 108,600 mt.
The macro sentiment has picked up, and the price of SHFE stainless steel has risen. Basically, steel mills resumed production, though it may miss market expectations. Downstream demand is recovering, and the absolute inventory is high. The price of NPI was lowered. It is believed that stainless steel prices have bottomed out, and the market shall pay attention to whether the stainless steel mills will cut output.
GF Futures is neutral over stainless steel prices.
