Posted on 15 Dec 2022
Chinese prices of 304-grade stainless steel under Mysteel's assessment continued rising during December 6-13, supported by the strong performance of the stainless derivatives market and positive sentiment among traders.
As of December 13, the spot price of 304/2B 2mm stainless cold-rolled coil (CRC) in Wuxi, a key stainless trading hub in East China's Jiangsu province, had increased by Yuan 200/tonne ($28.7/t) on week to Yuan 17,600/t, according to Mysteel's tracking.
Likewise, the spot price of 304/No.1 5mm stainless hot-rolled coil (HRC) also in Wuxi reached Yuan 17,000/t in-warehouse and including the 13% VAT on December 13, firming by Yuan 350/t on week.
Stainless traders were keen to raise offering prices of their 304-grade products recently, after noting the steady increase in stainless futures prices, a Shanghai-based market watcher observed.
The most-traded stainless contract on Shanghai Futures Exchange for January 2023 delivery closed the daytime trading session on December 13 at Yuan 17,495/t, being Yuan 290/t higher than the settlement price on December 6.
Also, "even though traders could facilitate sales by selling their stocks at lower prices, many have refused to do this because they believe that stainless users will soon have to start replenishing some quantities for the Chinese New Year holiday (during January 21-27)," she noted.
Nevertheless, the limited trading activity last week proved they were too optimistic about demand, according to her. "Thinned buying among stainless users and higher volumes of coils arriving at traders' warehouses led retail stocks of 300-series stainless products to accumulate," she added.
The total stocks of 300-series stainless CRC and HRC at commercial warehouses in Wuxi and Foshan in South China's Guangdong grew for the second week to 366,570 tonnes during December 2-8, albeit by a miniscule 0.1% on week, Mysteel's latest survey showed.
Although users do have replenishment need for 304 stainless steel, the high prices being offered currently are not acceptable to them, the source said, concluding that prices may retreat next week.
Source:Mysteel Global
