Further softening in China’s domestic stainless steel market

China's domestic stainless steel prices have indicated a further decline in the past week, under the influence of the weakness of nickel prices in the early part of the week.
 
During the past week, global nickel prices first dropped down, before then starting to rebound. On June 5, the three-month nickel price at London Metal Exchange (LME) closed at $15,340/mt, while LME nickel inventory on the same date totaled 179,898 mt.
 
Currently, domestic stainless steel market prices are very close to production costs. The profit margins of mills are quite limited and mills may choose to stop or restrict production in order to avoid incurring losses. The rebound in nickel prices in recent days has boosted the trading volume but has not yet provided support for price increases. However, domestic stainless steel prices are showing greater stability than before and fewer discounts are being offered. It is believed that stainless steel prices in the coming week will remain stable, though further softness may be witnessed in the longer term.