Both Futures And Spot Prices Of Stainless Steel Fell, And The Role Of Cost Support Weakened

After the price control of steel mills was lifted, the price of finished products fell
According to research, in February 2023, the in-plant inventory of 15 mainstream stainless steel factories in China was 1.0989 million tons, an increase of 21.9% from the previous month. Among them: 354,000 tons of 200 series, an increase of 20.4% from the previous month; 528,000 tons of 300 series, an increase of 24.6% from the previous month; 216,900 tons of 400 series, an increase of 17.9% from the previous month.

Some steel mills maintain a high output in order to meet the production targets, but at this stage, the downstream demand for stainless steel is poor, the market inventory is backlogged, the shipments of steel mills have decreased, and the inventory in the plant has increased significantly.
After the price limit was cancelled, the spot price of 304 dropped significantly immediately. Due to the existence of profit margins, there was a demand for replenishment of some previous orders, but the overall transaction was still weak. The decline of hot rolling within the day is more obvious than that of cold rolling, and the price difference between cold and hot rolling is obviously restored.
Recently, the price of raw materials has been lowered, and the role of cost support has weakened
On March 13, 2023, among the 304 stainless steel smelting raw materials:
The price of purchased high ferronickel is 1,250 yuan/nickel, the cost of self-produced high ferronickel is 1,290 yuan/nickel, high carbon ferrochrome is 9,200 yuan/50 basis tons, and electrolytic manganese is 15,600 yuan/ton.
At present, the cost of smelting 304 cold rolling of waste stainless steel is 15,585 yuan/ton; The cost of smelting 304 cold rolling with high ferronickel purchased from outside is 16,003 yuan/ton; the cost of smelting 304 cold rolling with high ferronickel produced by itself is 15,966 yuan/ton.
At present, the profit margin of 304 cold-rolled smelting of waste stainless steel is 5.2%; the profit margin of 304 cold-rolled smelting of outsourced high-nickel-iron technology is 2.5%; the profit margin of 304 cold-rolled smelting with self-produced high ferronickel is 2.7%.
The spot cost of stainless steel continues to decrease, and the cost support has weakened, but the spot price has fallen faster than the raw material, and is gradually approaching the cost line. It is expected that the price of stainless steel will fluctuate weakly in the short term. For the follow-up market, we need to continue to pay attention to the situation of inventory digestion and downstream recovery.