Posted on 19 Jan 2023
The rise in Chinese spot prices of 304-grade stainless steel that began in the last week of December ran out of steam during January 10-17, with trading in the market quietening significantly ahead of this weekend's start of the Chinese New Year holiday, according to market sources.
As of January 17, the spot price of 304/2B 2mm stainless cold-rolled coil (CRC) in Wuxi, a core stainless trading hub in East China's Jiangsu province, was unchanged on week at Yuan 17,600/tonne ($2,597.8/t) in-warehouse and including the 13% VAT.
In parallel, the spot price of 304/No.1 5mm stainless hot-rolled coil (HRC) in Wuxi was still at the same price of Yuan 17,000/t in-warehouse and including the 13% VAT on January 17 as during the week before.
"Stainless buying slowed further during the past week, as most stainless processors and traders began their (CNY) holidays from last weekend, a week earlier than on the Lunar calendar," a Shanghai-based market watcher observed, adding that many logistics services companies and warehouses were closed already.
Due to weakened buying, the total stocks of 300-series stainless CRC and HRC at commercial warehouses in Wuxi and Foshan in South China's Guangdong swelled to 538,264 tonnes over January 6-12, some 10% higher on week and logging the seventh successive on-week increase, Mysteel's latest survey showed.
Nevertheless, most traders remain optimistic about stainless demand after the holiday, according to him. They expect that production among stainless processors will accelerate when the domestic economy gradually recovers this year and consumption of their products picks up in tandem.
After the holidays, prices of 304 stainless steel will find support from the demand side and grow, he explained. "Spot prices have to move up at that time, as the spread between spot and futures prices currently is relatively large," he added.
Though trading activity cooled during the past week, stainless futures prices kept strengthening, Mysteel Global notes, with the most-traded stainless contract on the Shanghai Futures Exchange for delivery next month closing the daytime trading session at Yuan 17,170/t on January 18, up by Yuan 400/t from the settlement price on January 11, the exchange's data showed.
Source:Mysteel Global
