SteelOrbis Shanghai
Over the past two weeks, China's stainless steel market has been stuck in a downward track, with no improvement in the transaction situation regardless of the drop in prices. Stocks have piled up in the market and distributors at all levels hold varied quantities of supplies, with the result that there is also some variation in quotation levels. As of October 16, stainless steel inventories in Wuxi city, one of the biggest stainless steel markets in China, were estimated at 128,879 metric tons, rising 13,713 metric tons from half a month ago. Generally speaking, this season is not as good as what market players had been expecting based on previous years' experiences.
On October 25 in Foshan, ZPSS's 304/2B 2.0 mm coil cost RMB 33,000/mt ($4,412/mt), down RMB 1,500/mt ($201/mt) from the price level of October 11. The price of Baosteel's 304/No.1 3-4 mm thick coil dropped RMB 1,200/mt ($160/mt) to RMB 30,800/mt ($4,118/mt) over the same period. LISCO's 201/2B 2.0 mm coil was priced at RMB 15,700/mt ($2,099/mt), down RMB 400/mt ($53/mt) compared with two weeks previous. Meanwhile, TISCO's 430/2B 2.0 mm coil was still worth RMB 11,800/mt ($1,578/mt).
In Wuxi, ZPSS's and TISCO's 304/2B 2.0 mm coil price decreased about RMB 800/mt ($107/mt) to the range of RMB 32,600/mt-32,900/mt ($4,358-4,398/mt) over the same period. However, the prices of the 316L and 321 series almost remained stable with a not-so-bad transaction situation.
All these prices are on actual weight basis and include tax.
As to exports, in October traders' quotations have risen only slightly in comparison with the September level, with 304/2B 1.0 mm coils for the big steelmakers' products offered at $4,300/mt FOB. LISCO's 201/2B 0.8-1.2 mm coils cost $2,100/mt FOB, while secondary material from the re-rolling mills may be offered at $300/mt lower. 430/BA narrow strip of 1.0 mm thickness is being sold at $1,600/mt.
The stainless seamless tube market declined in mid-October, but has now become stable. Tube billet makers reduced their prices of round steel and tube billet due to sales pressure, resulting in a price dip for tubes. 304 108 mm x 4 mm tube costs RMB 41,000/mt ($5,481/mt) or so in the domestic market, dropping by RMB 2,000/mt ($267/mt) from one month ago. Meanwhile, the export quotation has decreased $100/mt to $5,500/mt FOB.
After the meeting of the big steel mills in Qingdao this week, it is said that ex-factory prices for both HR and CR 304 will go up by RMB 500/mt ($67/mt) in November. This price rise may rouse the market to some extent. At the same time, steelmakers are controlling their deliveries to the local market with a view to stabilizing the current market; for example, LISCO cut half of its contractual amount of 201/No.1 in October to domestic distributors.
All in all, the stainless steel market does not have much room for a further drop and might keep fluctuating moderately if no dramatic change occurs in the nickel price or in the international market.