China's March stainless steel output and April forecast

According to SMM surveys, China's stainless steel output totalled 3.1781 million mt in March, up 21.87% MoM and 16.38% YoY. 200-series output rose 22.91% MoM to 871,400 mt, 300-series up 21.37% MoM to 1.6919 million mt, and 400-series up 21.82% MoM to 614,800 mt.

In March, a traditional peak season, the actual terminal purchasing demand was not weak at the beginning of the month. Moreover, production resumption after the Spring Festival also contributed to demand recovery. Stainless steel mills scheduled high production in March, with the 300-series output reaching a historical high. The 200-series output decreased compared with March last year, affected by the reduced production during and after the Spring Festival, as well as maintenance and rectification plans of steel mills. Most of the downstream orders for 300-series stainless steel were based on the agreements in February-March. Since steel mills in North and South China received large orders after the Spring Festival, steel mills basically maintained full production, with 300-series stainless steel resuming production significantly. Due to the relatively stable industrial demand for 400-series stainless steel, the downstream production resumed normally after the Spring Festival. Supported by long-term contract orders, 400-series output increased significantly on both month-on-month and year-on-year basis.

In April, social inventory and in-factory inventory were both at high levels. The weakening downstream demand and bearish high-grade NPI prices caused by eased nickel ore supply concerns weighed on the stainless steel price. Stainless steel mills suffered serious losses. In April, a steel mill in East China has a plan to switch the production of 300-series to 400-series. 200 and 300-series output may sharply decline, while the 400-series output may increase.