SS Contract Fluctuated Fiercely, and the Demand was Limited in Recent Days

SHANGHAI Mar 21 (SMM) - Last week, LME nickel prices fell continuously to the lower limit after opening, while SHFE nickel prices remained slightly rangebound at high levels, which reduced the influence on stainless steel prices to a certain extent. SS contract rose initially then fell and hovered around 20,000 yuan/mt. In the spot market, due to the pandemic-related restriction, the traded prices and transaction could hardly reflect the fair market last week, and trading in the market was slack. However, stainless steel prices could speak for the market to some extent. The fundamentals of stainless steel had not much change last week. On the supply side, steel mills in China resumed the production in March, and the output is still expected to increase. Due to the limited transportation of raw materials, the new output is expected to decrease, but the overall output is still increasing. On the demand side, recently, the market demand was limited due to the pandemic, but it is expected that there will be a certain degree of centralised procurement after the market stabilises. However, in the long term, the market holds bearish expectations for the growth rate of demand. In the medium and long term, the prices of stainless steel will be contained from rising. In terms of cost, last week, the cost of raw materials was still high, which supported the prices of stainless steel to some extent. SS 2204 contract is expected to move between 18,800-20,800 yuan/mt this week.