Posted on 07 Jan 2025
China's stainless steel market experienced a significant downturn during December 27-January 3, hammered lower by a sharp drop in futures prices that deepened the bearish sentiment prevailing in the domestic market.
As of January 3, Mysteel assessed the spot price of 304-grade stainless cold-rolled coil (CRC) from Hongwang in Wuxi – China's largest stainless steel trading hub – at Yuan 12,850/tonne ($1,773.6/t) in-warehouse, including VAT. This marked a decline of Yuan 150/t from the previous week and pushed prices below the Yuan 13,000/t threshold.
Similarly, 430-grade stainless CRC prices, also in Wuxi, hit their lowest point since July 2020, assessed at Yuan 7,300/t on Friday, down by Yuan 50/t on week, according to Mysteel.
The slump in spot prices largely mirrored the decline in stainless steel futures. On January 2, the first trading day of 2025, the most-traded stainless contract on the Shanghai Futures Exchange for March delivery closed at Yuan 12,855/t during the daytime session, a notable 1.19% drop from the previous settlement on December 27.
In response, Tsingshan Group, a leading stainless steel producer in East China, reduced its list price for 304-grade stainless CRC products by Yuan 100/t on January 3 –Tsingshan's first price cut for 304-grade stainless coil since November 26. Hongwang's 304 CRC is now listed at Yuan 12,700/t.
Meanwhile, total stainless steel stocks at the 89 warehouses across six major Chinese cities monitored by Mysteel had dipped slightly by 0.92% on week to 895,000 tonnes as of January 2. However, market watchers suggested the price reduction would likely spark some recovery in demand and cause the drawdown in inventories to pick up.
Indeed, they believe that the current low inventory levels may lend some support to prices, as traders are facing high procurement costs and limited stockpiles and so are reluctant to further lower their offering prices.
Source:Mysteel Global
