China's Stainless Steel Exports Surged by 16.3% MoM in May, CRC Imports May Continue to Decline in June [SMM Analysis]

Imports: According to SMM, China's stainless steel imports in May were 184,700 mt, down approximately 8.87% MoM and 8.14% YoY. In April, the stainless steel imports from Indonesia were about 148,000 mt (excluding stainless steel scrap), up approximately 28.79% YoY but down about 10.85% MoM. By type, the imports of plates and coils recorded the largest decline to reach 112,300 mt, down about 18.76% MoM, while imports of narrow strips and ingots slightly increased. Since May, social inventories and stocks held by stainless steel mills have accumulated to high levels, increasing domestic inventory and sales pressure, leading to a significant decline in CRC imports. CRC imports were 124,700 mt, of which 94,900 mt were imported from Indonesia, down about 16,900 mt MoM. In June, the approval progress of nickel ore remained slow. Although NPI prices fell, the decline was limited. With high stainless steel costs and unresolved oversupply in Indonesia, crude steel and CRC production in June are expected to decline. Therefore, China's stainless steel imports are likely to run weak.

Exports: According to SMM, China's stainless steel exports in May were 554,500 mt, up 16.3% MoM and 41.83% YoY. Despite the high export base in April, May still saw a significant increase, reaching a new high since July 2022. By type, the exports of plates and coils recorded the largest increase to reach 332,200 mt, up 48,700 mt or 17.16% MoM. Profile exports grew by 15.49% MoM and stainless steel tubing exports rose by 19.05%. By country, Exports to Turkey in May reached the top for the first time, recording 52,500 mt. Although restricted by anti-dumping measures, exports to India slightly recovered from April to stand at 41,800 mt. Exports to other Southeast Asian countries such as Cambodia, Thailand, Malaysia, and Bangladesh also saw certain growth. In contrast, overall demand in Europe and the US, except for Russia, remained weak. On one hand, entering summer, a traditional off-season for stainless steel consumption, the consumption in Europe and the US weakened. On the other hand, June is the hottest period in tropical regions like India, which may further reduce the operating rate. Overall, while current anti-dumping restrictions on stainless steel trade are evident, domestic export price advantages persist as high nickel ore prices kept overseas stainless steel costs high. It is expected that overseas demand for stainless steel in June may weaken but still maintain a relatively high level.