Chinese stainless steel makers were reducing production in October, but the decline was not enough to support the market prices. As a result, mills scheduled more output reductions for November.
According to information from twelve key producers in the country, STS production was reduced by 190 kt in October, the leading local industrial media reported. The continuous price lowering and weaker-than-expected demand caused losses at mills. “We prefer to produce less losses, so we produce less steel,” a representative of a mid-sized manufacturer told SMR.
Output dropped mainly in the 200 and 300 series, while margins did not fall so much in the 400 series, keeping production relatively stable.
The same twelve mills reported plans to reduce their production by another 265 kt in November. There are some hopes for a market price rebound thanks to this decline. Besides, weaker demand for raw materials in October pushed some ferrochrome and ferronickel suppliers to revise their production plans for November as well. “STS market prices need support from upstream. If main raw materials bottom out, finished steel quotes will also increase,” a trader in the country told SMR.
The sentiment is mixed in China’s market in late October, as most STS makers are talking about the necessity of price rebound due to losses in recent months; all the positive factors look doubtful from the other side. “Demand is weak, production is being reduced continuously, and there is no support from the raw materials, but we hope for a rebound. Probably some positive economic news will help us” a head of sales at Shandong-based mill told SMR on October 31.
Post time: Nov-21-2023
