Chinese stainless steel prices fall on weak demand and lower raw materials costs

Chinese stainless steel prices fell in the week ended Wednesday October 23 in both the domestic and export markets, in response to weak demand and lower-cost raw materials, sources told Fastmarkets

Fastmarkets’ weekly price assessment for stainless steel cold-rolled coil 2mm grade 304 domestic, ex-whs China was at 13,500-13,700 yuan ($1,894-1,922) per tonne on Wednesday, down by 100-200 yuan per tonne from 13,700-13,800 yuan per tonne a week earlier.

The demand for type 300 stainless steel remained limited over the past week, reflecting the lack of orders for downstream end users.

“The volume of October stainless steel sales is lower than September and may well continue to fall in the seasonally weak months of November and December,” a trader in east China told Fastmarkets.

“The next two months are the time for buyers to pay final payments to their suppliers, so buyers will [have] tight cashflows and become more cautious about buying stainless steel,” a second trader in the region said.

In addition to weaker demand, the fall in upstream raw materials also played a part. 

Fastmarkets’ weekly price assessment for ferro-chrome spot 6-8% C, basis 50% Cr, ddp China dropped by 50 yuan per tonne to 8,350-8,550 yuan per tonne on October 22, from 8,400-8,600 yuan per tonne on October 15.

Fastmarkets’ weekly price assessment for nickel pig iron, high-grade NPI content 10-15%, contract, ddp China was 1,030-1,050 yuan per nickel unit on Friday October 18, up by 20-30 yuan per nickel unit from 1,010-1,02 yuan per nickel unit on October 11.

But the nickel futures market was on a downward trend over the past week and market participants thought weak futures may have a negative influence on NPI prices.

The most-traded November nickel futures contract on the Shanghai Futures Exchange closed at 126,000 yuan per tonne on Wednesday, down by 6,550 yuan per tonne from the closing price of 132,550 yuan per tonne on October 16.

But prices for type 400 stainless steel showed a different trend to type 300 stainless over the week to Wednesday.

Fastmarkets’ weekly price assessment for stainless steel cold-rolled coil 2mm grade 430 domestic, ex-whs China was at 7,500-7,700 yuan per tonne on Wednesday, up by 200 yuan per tonne from 7,300-7,500 yuan per tonne a week earlier.

“The price rise this week was due to stronger demand last week after prices fell to 7,300-7,500 yuan per tonne, which was a multi-year low,” a trader in south China said.

And an export trader in east China said: “I bought some 430 stainless steel for delivery of my export orders last week.”

Fastmarkets’ steel price data combines the intelligence of industry-leading brands such as Metal Bulletin, American Metal Market, Scrap Price Bulletin and Industrial Minerals. Learn more about our steel prices.

China exports

The decline in China’s domestic stainless steel prices led to cost reductions for exporters, who then dropped their export prices to attract orders.

Fastmarkets’ price assessment for stainless steel cold-rolled coil 2mm grade 304 export, fob China was at $2,000-2,060 per tonne on Wednesday, down by $40-50 per tonne from $2,040-2,110 per tonne a week earlier.

Fastmarkets’ assessment for stainless hot-rolled coil grade 304 export, fob China was at $1,960-2,020 per tonne on Wednesday, down by $40 per tonne from $2,000-2,060 per tonne a week earlier.

“[Overseas] buyers with requirements of [specific] stainless steel produced by certain Chinese producers are continuing to buy cargoes from China, but far more have little interest in Chinese products and are buying from suppliers in other regions,” a second exporter in east China said.

East Asia imports

Fastmarkets’ weekly price assessment for stainless steel cold-rolled coil, Asia grade 304 (2mm 2B), cif East Asian port was $2,050-2,080 per tonne on Wednesday, narrowing downward by $10 per tonne from $2,050-2,090 per tonne a week earlier.

Fastmarkets’ assessment for stainless steel hot-rolled coil Asia grade 304, cif port East Asia was at $1,940-1,970 per tonne on Wednesday, down by $10 per tonne from $1,950-1,980 per tonne a week earlier.

South Korea plans to impose anti-dumping (AD) duties of 3.66-11.37% on cold-rolled flat stainless steel produced in Vietnam, with a final decision expected in November, according to a notice published by the Korea Trade Commission on October 17.

“If South Korea decides to impose AD duties, Vietnamese exporters will increase exports to the other markets of East Asia, which would put downward pressure on East Asia stainless steel prices,” an importer in eastern China said.

Importers in East Asia are, therefore, taking a wait-and-see approach, which has resulted in a lack of imports over the past week and a slight dip in prices, Fastmarkets understands.

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