China’s STS CR market still bearish

The downtrend still prevailed in China’s stainless steel market during the first half of November. Demand was still weak inside the country, but some improvements were seen in exports.

The export offers for 304 2B CR coils (2 mm) dropped by USD 70-80/t over two weeks to USD 2,020-2,130/t FOB. The material produced by Hongwang, Delong, and Yongwang was available at around USD 2,020/t FOB on November 15, SMR learned from market sources. Yongjin’s coils were offered at around USD 2,100-2,130/t FOB.

After the decline, the new prices attracted somewhat more attention from Asian buyers. “Although the domestic market is still extremely sluggish, export trading has been improved obviously,” an export manager in a Chinese trading company told SMR. Higher buying activity was mainly seen in South Korea, Vietnam, Indonesia, Iran, and Turkiye. “Some foreign customers need to replenish stocks now, but it seems export sales would not be improved for a long time,” another Chinese market insider commented on the situation.

The weak economy in such countries as Turkiye, Indonesia, and even South Korea (this year) pushes STS-making companies to enlarge import purchases of feedstock from China, as it is the most cost-effective way, while own production is more expensive and loss-making for them.

Domestic demand in China was still “terrible,” suppliers reported. Despite massive production cuts in October-November, inventories were still growing over the corresponding period. During the first week of November, STS stocks in Wuxi increased by 3.3% or 21 kt to 643 kt.

Further output reduction is expected for December, as “there are no other ways to battle with oversupply now,” a major mill representative told SMR on November 15. Chinese leading industrial media forecasted another 5% decline in the country’s STS production this month.

Local prices for 304 B CR coils (2 mm) dived by RMB 400-500/t (USD 56-70/t) over the first two weeks of November, touchin

Post time: Nov-20-2023

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