Posted on 26 Jan 2024
The spot prices of 304-grade stainless steel in China were boosted higher during January 16-23, primarily by the strengthening in the country's stainless futures market, market sources shared. Also, the rather healthy state of fundamentals in the spot stainless market served as another driving force for the prices of the austenitic grade.
The spot price of 304/2B 2mm stainless cold-rolled coil (CRC) in Wuxi, a top stainless trading hub in East China's Jiangsu, increased to Yuan 14,500/tonne ($2,022/t) in-warehouse and including the 13% VAT on January 23, with a weekly rise of Yuan 200/t, Mysteel's assessment showed.
Meanwhile, the spot price of 304/No.1 5mm stainless hot-rolled coil (HRC) in Wuxi was Yuan 250/t higher on week at Yuan 13,550/t in-warehouse and including the 13% VAT on January 23.
The rebound in China's stock market of late after the previous plunge saw the domestic futures markets of many commodities including stainless steel strengthen, Mysteel Global noted. Such improved sentiment in its derivative market propped up spot prices of stainless steel in turn.
The most-traded stainless contract on the Shanghai Futures Exchange for March delivery went up by a total of Yuan 455/t from the settlement price on January 16 to close the daytime trading session at Yuan 14,330/t on January 23.
On the other hand, the pressure on most domestic stainless traders regarding their steel stocks remained low recently, despite the fact that the country's stainless trading was not so robust during the recent few months, according to an analyst in Shanghai.
"In fact, the accumulation in traders' current stainless stocks appeared much limited compared to the increase in the same period of 2023," she added, saying that such a scenario provided some support to the 304 prices.
For example, total stocks of 300-series stainless CRC and HRC at commercial warehouses in Wuxi and Foshan in South China's Guangdong under Mysteel's weekly survey still recorded an on-year fall of 19% on January 18, after the volume finally ended nine straight weeks of declines by rising 2.9% on week.
The source explained that the major reason behind the relatively small accumulation in stainless steel stocks so far this year was that many stainless mills scaled back their output in January.
Mysteel's tracking showed that China's major 43 stainless steelmakers were estimated to produce 2.74 million tonnes of crude stainless steel this month, down by 7.4% from December 2023.
Source:Mysteel Global
