Stainless Steel Inventory Grows Significantly amid Poor Downstream Orders and Stable Shipment ahead of CNY Holiday

SHANGHAI, Feb 1 (SMM) - In the second half of January, most stainless steel mills were closed early for Chinese New Year (CNY) holiday, but the shipment did not suspend completely, hence the social inventory remained high.

In detail, a number of mills that mainly engage 200-series stainless steel carried out maintenance in the second half of January, and stopped making shipment ahead of CNY holiday. Falling supply and demand only resulted in slight increase in stainless steel social inventory. The social inventory of 300-series rose significantly amid poor market demand and normal shipment during CNY holiday though the market players were off early for holiday. The social inventory of 400-series also added mainly due to sluggish demand at year-end though the shipment slowed in January.

To sum up, most market players were halted for CNY holiday in January. In the first trading week after the holiday, the recovery of downstream demand was not as good as the market had expected. Since the stainless steel mills kept making shipment during the holiday, the social inventory accumulated palpably, weighing on spot prices. 

In the first half of February, social inventory of stainless steel may accumulate slightly further. According to SMM research, although the market players are optimistic about the market in early 2023, it will still take some time for the terminal demand to be fully unleashed. SMM expects that the spot prices of stainless steel may post minimal momentum in the first half of February amid inventory pressure.

As of January 31, the total social inventory of stainless steel stood at about 779,500 mt, a MoM increase of about 14.87% and up 14.01% from half a month earlier. The inventory of 200-series stainless steel grew 2.81% MoM, 300-series stainless steel added 22.87%, and 400-series rose 2.97%.