China’s Feb stainless output at 8-month low

Posted on 09 March 2021

China’s crude stainless steel output continued to decline in February to the eight-month low of 2.58 million tonnes, according to Mysteel’s latest monthly survey among the country’s 32 stainless producers. More stainless producers conducted maintenance on their steelmaking facilities last month given the quiet market during the Chinese New Year holiday.

Last month’s total output of the surveyed mills posted a sharper on-month fall of 6.9% compared with the on-month dip of 1% for January. Among the total, production of the 200-series stainless witnessed the largest on-month decline, plunging by 10.9%, followed by the 300-series stainless output, which was down 5% from the prior month, the data showed.

China’s stainless output (Unit: tonne)

Product

Feb

M-o-M

Y-o-Y

200-series

870,400

-10.88%

68%

300-series

1,132,200

-5.02%

17.57%

400-series

575,200

-4.12%

58.72%

Total

2,577,800

-6.89%

39.83%

Source: Mysteel

The lower output in February was within market expectations as domestic stainless producers usually conduct maintenance when demand from end-users slows during the CNY break, Mysteel Global noted.

However, despite the on-month decline, last month’s stainless production was still about 40% higher compared with the same period of last year. The jump was large, partly because Chinese stainless mills were ramping up output because stainless prices were profitable, but also because production in February last year was impacted by the coronavirus onslaught which closed factories and disrupted logistics.

This year, most stainless producers had received many orders before the CNY break for delivery in March, a market source in Shanghai observed. “This, coupled with the healthy profit margins available, especially for 200- and 400-series stainless products, led the makers to prefer to resume production soon after completing the maintenance.”

For March, domestic stainless output is expected to see a substantial recovery to reach 2.91 million tonnes, reversing up 12.8% on month or up 35.5% on year, Mysteel estimated, based on responses from among the surveyed 32 Chinese mills.

Meanwhile, the combined production of crude stainless at the Indonesian works of Tsingshan Holding Group and Jiangsu Delong Nickel Industry Co gained further in February, gaining another 14.2% on month to 330,000 tonnes. The tonnage for March is forecast to grow another 24.2% on month to 410,000 tonnes, according to the survey.

Though Chinese stainless prices saw significant growth after the CNY holiday ended on February 17, those for 200- and 300-series stainless have retreated somewhat this month with the plunge in nickel prices, Mysteel Global noted.

For example, the spot price for 304/2B 2mm stainless CRC in Wuxi in East China’s Jiangsu province was at Yuan 16,300/tonne ($2,505/t) in-warehouse and including the 13% VAT as of March 5, higher by Yuan 450/t on month or losing Yuan 300/t from the 3.5-year high on March 3, according to Mysteel’s data.

As of March 5, the three-month nickel buyers’ price on the London Metal Exchange was at $16,379/t, down $1,616/t on month or plummeting by $3,343/t from the recent high on February 22, the exchange’s data showed.

Source : Mysteel Global