Profits of Stainless Steel Mills will Shrink Further this Week

SHANGHAI, May 4 (SMM) - Prices of stainless steel fluctuated downward last week on poor demand and some traders' dumping of goods. Stainless steel mills may ramp up production intensively with the improvement in profit margins. The cost of the RKEF process stood at around 15,566 yuan/mt, and that of the non-RKEF process was about 15,624 yuan/mt. SHFE nickel prices edged lower last week amid the surging US dollar index. The NPI prices stood stable because of the game between NPI plants and stainless steel mills. As for the stainless steel scrap, its cost efficiency fell sharply on limited market supply. The ferrochrome factories increased their output regardless of the higher chrome ore quotes as the stainless steel mills offered higher purchase prices of ferrochrome. SMM believes that the ferrochrome prices will be stable this week with the stainless steel mills' intensive production ramp-up in May. The overall costs of stainless steel will stabilise, while the stainless steel prices will probably experience some declines amid the growing supply. As a result, the profits of stainless steel mills will shrink further this week.