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Chinese stainless steel prices rise strongly in September amid output cuts

Thursday, 30 September 2021

Stainless steel prices in southern China’s Foshan spot market increased strongly month on month by Sept. 30, with some prices hitting 10-year highs, mainly led by the reduced supply amid power restrictions in some key production regions in the country.

S&P Global Platts assessed grade 304, 3 mm thick hot-rolled coil at Yuan 20,550/mt ($3,179/mt) ex-warehouse, up Yuan 2,250/mt on the month and the highest point since September 2011.

Grade 304, 2 mm thick cold-rolled coil was assessed at Yuan 21,550/mt ex-warehouse, up Yuan 1,950/mt on the month and the highest since October 2011.

Nickel prices dropped to below the $19,000/mt mark again late of the month, with the official nickel cash price on the London Metal Exchange settling at $18,615-$18,625/mt on Sept. 29, down $612.50/mt on the week and down $248/mt month on month.

Behind the strong rally in China was mainly reduced supply caused by output cuts at some major mills, along with continuous healthy demand for stainless, market sources said.

“But recently the spreading power restrictions have also impacted downstream manufacturers in southern China, which makes outlook quite confusing now,” said a China-based trader. For October, “it will depend on which side from supply and demand being impacted more seriously … but I don’t expect mills would lower their prices so prices would be more likely to fluctuate at high level as power cuts seem to continue next month.”

Platts assessed nickel-free grade 430/2B CRC 2 mm thick at Yuan 11,000/mt ex-warehouse, stable on the month.

Separately, Platts assessed 304-grade 2 mm 2B stainless CRC at $3,330/mt CFR East and Southeast Asian port on Sept. 30, up $20/mt week on week.

The market was mixed during the week, when the Chinese domestic market saw some corrections at month-end, but Taiwanese mills raised list prices sharply by some $200/mt on the month at $3,600/mt CIF for October shipment.

It needs time to see whether buyers would accept this high price level, but mills are willing to boost prices due to power restrictions and output cuts in China, said a regional trader.

The most actively traded November stainless steel contract on the Shanghai Futures Exchange was at Yuan 19,750/mt on Sept. 30, down Yuan 1,195/mt, or 5.7%, on the week. The most active contract had been falling mostly in the latest two weeks but was still Yuan 2205/mt higher than the level seen one month ago.

-- Staff

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