According to SunSirs price monitoring data, stainless steel prices have recently shown a downward and then upward trend. As of September 18, the average daily spot price of 304/2B stainless steel sheet (specifications: 1.0 x 1219 x 2438 mm; tolerance 0.91 mm) was 12,850 yuan/ton, unchanged from the beginning of the week but up 5.76% year-on-year.
According to SunSirs’ price spread analysis tool, nickel and stainless steel prices have shown similar price trends, with both falling and then rising recently.
Last week, total stainless steel inventories were 1.1511 million tonnes, down 0.58% from the previous week, with both cold-rolled and hot-rolled steel inventories declining.
Raw Materials: Last week, the raw materials sector as a whole was under downward price pressure. High-nickel pig iron was quoted at around 1,063 yuan per unit of nickel (tax-inclusive, CIF price), and prices continued to fall, weakening cost support. The main price of high-carbon ferrochrome was 7,950-8,050 yuan per 50 tonnes, while the FOB price of South African chrome ore fell to $280 per tonne, further weakening cost support. The price of 304 stainless steel scrap (cuttings) in East China was 9,700-9,800 yuan per tonne, consistent with the downward trend of finished product prices; although the advantage of using scrap over raw materials has increased, it is difficult to fully exploit this advantage.
On the supply side, crude steel production in September is estimated at 3.6473 million tons, down 1.98% from the previous month and up 6.44% from a year earlier; of this, 300 series steel production is 1.9647 million tons, down 0.09% from the previous month. Although the willingness of steel mills to voluntarily reduce production has increased, output is still higher than the same period last year, and supply pressure remains. On the inventory side, total inventories in the two major markets of Wuxi and Foshan fell to 923,800 tons, down 0.26% from the previous month, breaking the previous trend of inventory accumulation and indicating a slight easing of inventory pressure during the peak season.
Demand: During the peak “Golden September” sales season, actual demand from end consumers remained weak, and performance fell short of expectations. Purchases in the end-use segment were primarily driven by short-term demand; purchase volumes in sectors such as construction and finishing, as well as machinery, fell short of targets, leading to an overall sluggish market. Apparent consumption for the first seven months reached 9.2997 million tonnes, up nearly 10% year-on-year, but this growth was primarily driven by restocking in the end-use segment rather than actual consumption by end consumers. Purchases in sectors such as home appliances and kitchen/bathroom equipment were limited to meeting essential needs, and a sluggish real estate market also dampened demand for construction steel.
Influencing factors: At the macro level, the Federal Reserve raised interest rates by 25 basis points in September, raising the federal funds rate to a range of 3.75%-4.00%. Following this move, its immediate negative impact largely abated, leading to a general recovery in base metal futures and a rise in benchmark stainless steel prices. On the raw materials side, West Indonesian nickel mines were allowed to gradually resume production, raising market expectations of improved ore supplies and putting downward pressure on high-nickel pig iron prices. In the export sector, new EU regulations on traceability of the “smelting and casting” process will take effect on October 1, increasing compliance costs for exporting companies.
Overall, on the cost side, prices for nickel pig iron and ferrochrome declined simultaneously, leading to a further reduction in cost support. On the supply side, September production plans showed a decline compared to the previous month (although they remained high year-on-year), and public inventories are declining moderately, helping to ease supply pressure to some extent. On the demand side, the expected peak season did not materialize; demand from end users remained weak, leading to a relatively weak supply-demand balance. Although market sentiment recovered in the short term following the Fed’s rate hike, fundamentals remain weak; the combined effect of reduced cost support and weak demand suggests that stainless steel prices may continue to fluctuate next week, demonstrating a downward trend.
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