Stainless Steel Profits Narrow amid Sharper Decline in Finished Product Prices

SHANGHAI, Apr 11 (SMM) - Prices of stainless steel fell last week, and so did its costs. The rebound of pure nickel prices near the delivery of SHFE 2304 nickel deepened the loss of some stainless steel mills. The mills reduced production intensively due to the sluggish trading but still failed to curb the prices from dropping. The cost of the RKEF process stood at around 15,770 yuan/mt, and that of the non-RKEF process was about 16,245 yuan/mt. Pure nickel prices surged amid the large spread between the front-month and next-month contracts. As invisible NPI inventory flowed into the market, traders dumped their goods, sending the NPI prices into a nosedive. Stainless steel scrap prices also slumped under pressure from NPI plants and stainless steel mills. Many ferrochrome plants cut their production on high costs and poor demand from stainless steel mills. It is expected that the ferrochrome prices will be stable with some downward potential. In general, the stainless steel mills’ profit margins shrank on the faster fall in stainless steel prices. The mills are less likely to increase production in April. Although the in-plant and social inventory of stainless steel were both on a downward track, the prices will still run with some downward potential this week on the poor demand. SMM expects that the profits of stainless steel mills will fluctuate at the current level this week.