SHANGHAI, Mar 10 (SMM) - Stainless steel prices rose from 18,500 yuan/mt to 21,500 yuan/mt and then fell back to 18,500 yuan/mt within three days.
SMM once mentioned that in March, on the fundamentals, the weaker stainless steel price was more realistic. On one hand, with the resumption of production of steel mills, the expected output of stainless steel increased. Moreover, the project of a steel mill in Xiangshui is expected to be put into production in advance again. On the other hand, demand for stainless steel this year is slightly less than expected. Stainless steel downstream processing plants and end-users planned to reduce orders due to the high cost.
When nickel prices hit historical new highs again and again, stainless steel prices also stopped falling and rebounded. However, due to the deviation from the fundamentals, the prices of stainless steel dropped sharply, and there is even a possibility of falling again.
SMM holds the view that the supply of raw materials in the medium and long-term is of utmost concern. The reasons are, first of all, imported raw materials may be restricted from entering the domestic market due to the expanding import losses and the settlement method. Secondly, if the tight supply of raw materials intensifies, the steel mills will be forced to stop or reduce production, which will cause the increase of supply less than expected. Besides, Indonesia’s stainless steel production decreased slightly in February and March, so a part of domestic stainless steel will be exported to a certain extent.