Posted on 12 Jul 2024
During the week of July 3-10, China's 304 stainless hot-rolled coil (HRC) market outperformed that of cold-rolled coil (CRC) in Wuxi, a key production hub in Jiangsu province, primarily because better end-user demand during the week led HRC inventory levels to decrease.
As of July 10, the spot price for 304/No.1 Tsingshan 5*1520mm stainless HRC in Wuxi had increased slightly by Yuan 50/tonne ($6.9/t) on week to reach Yuan 13,400/t in-warehouse, including 13% VAT.
Mysteel Global observed that the better performance of the 304-grade stainless HRC market was mainly reflected in the reduction in traders' stocks over the past week. In commercial warehouses in Wuxi and Foshan in South China's Guangdong, inventories of austenitic grade stainless HRC had decreased by 2.9% to 219,885 tonnes as of July 11, according to Mysteel's survey.
Encouraged by the lower HRC inventories, domestic traders maintained firm offering prices as users such as home appliance manufacturers procured stainless products for their immediate production needs, a market watcher remarked.
As for stainless CRC, Mysteel's assessments revealed that prices for 304/2B Hongwang 2*1240mm stainless CRC in Wuxi remained flat over the past week at Yuan 13,950/t in-warehouse as of July 10 including 13% VAT, a slight retreat from a peak on July 8 of Yuan 14,050/t.
During the week of July 4-11, inventories of austenitic grade stainless CRC in the stockyards tracked by Mysteel in the two hubs had increased by 1.16% to 488,034 tonnes.
In the derivatives market, the most-traded stainless contract on the Shanghai Futures Exchange for September delivery – covering 304/2B stainless CRC 2.0 mm thick and up to 1,219 mm wide – had lost Yuan 210/t by the end of the July 10 trading session from the settlement price of July 3.
Given the softening futures, prices of 304-grade stainless CRC and HRC are likely to decline in the near term, according to a Wuxi-based analyst. This is especially true after Tsingshan Group, China's largest stainless producer based in East China's Zhejiang province, announced on July 10 that it had reduced its list price for all 304-grade stainless products for July sales by Yuan 100/t.
Source:Mysteel Global
