- Crude stainless steel output rebounds in October
- Output up for 300 and 400-series, 200-series declines
- Elevated production strains domestic demand
Mysteel Global: China’s crude stainless steel production rebounded in October, showing a 0.2% increase compared to September, reaching 3.29 million tonnes (mnt). This recovery follows a dip in output the previous month, driven largely by higher production of 300- and 400-series stainless steels, which rose by 0.7% and 1.3%, respectively. In contrast, 200-series stainless output dropped by 1.4%.
The rise in production was largely driven by the recovery in stainless prices during the first half of October. This encouraged mills to maintain high run rates. However, prices started to lose ground towards the end of the month, putting pressure on the market. As of 31 October, the spot price for 304/2B cold-rolled stainless coil in Wuxi was assessed at RMB 13,600/t ($1,893/t), a decline of RMB 450/t ($62/t) from the mid-month peak.
Despite the rise in output, demand from end-users in China failed to meet expectations, contributing to a build-up in inventories. By the end of October, stainless inventories at major warehouses in Wuxi and Guangdong had increased by 1,693 t to 911,425 t, suggesting a mismatch between supply and consumption. This is particularly notable given that October is typically a peak month for stainless consumption in China.
Looking ahead, it is expected crude stainless output to rise further in November, with a projected 2.1% m-o-m increase to 3.36 mnt. Production at mills in Indonesia operated by Chinese producers, such as Tsingshan Holding and Xiamen Xiangyu, also saw a slight uptick in October and is expected to continue growing.
Overall, while production volumes continue to climb, the pressure on domestic demand and rising inventories point to a challenging near-term outlook for the Chinese stainless steel market.
Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.
