Will the News of Maintenance Stabilise Stainless Steel Prices?
13:50 Dec 09, 2021 Source: SMM

SHANGHAI, Dec 9 (SMM) – The stainless steel prices continued to fall in the past few days. The prices of 304 cold-rolled coils have fallen by over 1,000 yuan/mt. The steel mills are about to suffer losses, and some of them plan to conduct maintenance to ease the environmental pollution as well as stop losses. Will the production cuts support the stainless steel prices effectively? The market participants hold different opinions.

Trader A: The maintenance of many steel mills will only affect a small part of the production, so the output will not decline significantly. However, the demand has dropped by at least 50%. The steel mills have high inventories of finished products, and the market supply is sufficient. Besides, some steel mills will end the maintenance by the end of December, while the demand will not grow in January 2022.

Therefore, even though these steel mills would actually reduce the production for maintenance, the supply would not be short amid the weak demand. The users will maintain the purchases on rigid demand, and some users may even stop purchasing before the Chinese New Year holiday. The stainless steel prices will continue to fall without support.

Some traders believe that the pivot is close, and they expect the prices to rebound.

Trader B: Such sharp price drops should drive up the purchases. The production reduction of steel mills may boost the sales and at least make the stainless steel prices stabilise. However, the prices will remain in a downward trend in the long run.

SMM expects the spot prices of stainless steel to move downward steadily amid poor consumption until the Chinese New Year.

Key Words:  stainless steel  price  maintenance 
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