China’s domestic stainless steel prices rise following metal sanctions on Russia

China's stainless steel prices saw a notable increase last week, driven by global sanctions affecting nickel, which is a key component

Domestic stainless steel prices in China rose in the week to Wednesday April 16 following expectations of an increase in nickel prices on the back of fresh metal sanctions on Russia, sources said.

China’s domestic prices

Fastmarkets’ price assessment for stainless steel cold-rolled coil 2mm grade 304 domestic, ex-whs China was 13,700-13,800 yuan ($1,892-1,906) per tonne on Wednesday, up by 100-150 yuan per tonne from 13,600-13,650 yuan per tonne a week earlier.

The US and UK governments have restricted the trading of new Russia-origin aluminium, copper and nickel on global metal exchanges and in over-the-counter derivatives effective Saturday April 13, which raised steel mills’ expectations that nickel prices would climb and stainless prices would follow suit, sources said.

Several stainless steel mills raised their list prices of stainless corrosion resistance classes (CRC) to 13,700-13,900 yuan per tonne on Monday April 15, up by 300 yuan per tonne from 13,400-13,600 yuan per tonne a week earlier but buyers did not bite given that the climb in nickel prices fell short of steel mills’ expectations.

The most-traded May nickel futures contract on the Shanghai Futures Exchange closed at 139,240 yuan per tonne on Monday, up by 990 yuan per tonne from 138,250 yuan per tonne on April 12.

Buyers only accepted a price increase of 100-150 yuan per tonne, with deals of stainless steel CRC concluded at 13,700-13,800 yuan per tonne, sources said.

“The downstream industries remain weak so there is not much potential for the demand for stainless steel to increase. That is why buyers are not accepting the higher prices,” a trader in Wuxi said.

The weakness is major downstream industries is prevalent in China’s property sector for instance, with new housing starts totaling 172.83 million square meters in the first three months of 2024, down by 27.8% year on year, according to data published by the National Bureau of Statistics on Tuesday April 16.

China’s export stainless steel prices

Fastmarkets’ price assessment for stainless steel cold-rolled coil 2mm grade 304 export, fob China was $2,020-2,080 per tonne on Wednesday, up by $20-40 per tonne from $2,000-2,040 per tonne a week earlier.

Fastmarkets’ assessment for stainless hot-rolled coil grade 304 export, fob China was $1,950-2,000 tonne on Wednesday, unchanged from a week earlier.

Exporters raised the prices of stainless CRC following the increase in China’s domestic prices but kept stainless HRC export prices unchanged amid stable domestic prices, sources said.

“Overseas buyers have asked for discounts but Chinese exporters did not reach an agreement with them,” an exporter in China said.

Export activity in type 300 stainless steel also remained tepid. Some exporters sold other types of stainless steel in the week to Wednesday, with cargoes of 430/2B CRC exported at $1,230-1,240 per tonne FOB China.

East Asian imports

Fastmarkets’ assessment for stainless steel cold-rolled coil 2mm grade 304 import, cif port East Asia was $2,000-2,030 per tonne on Wednesday, up by $90-100 per tonne from $1,910-1,930 per tonne a week earlier.

Fastmarkets’ assessment for stainless steel hot-rolled coil grade 304 import, cif port East Asia was $1,900-1,920 per tonne on Wednesday, up by $90-100 per tonne from $1,810-1,820 per tonne a week earlier.

Indonesian exporters also raised export prices on the back of the fresh metal sanctions on Russia but the higher prices led to lower interest among East Asian buyers, sources said.

“China’s domestic prices only rose by a mere $15-20 per tonne, so importers cannot accept the increase of $90-100 per tonne of import prices,” an importer in China said.

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