The sparse trading led some sellers to cut their prices though some of their more optimistic peers raised them in anticipation of a gradual recovery of demand.
Both the central Chinese government and local authorities have encouraged companies to start returning to work, having initially instructed them to delay their restart after the Chinese New Year as a result of the coronavirus outbreak.
In Jiangsu province where Wuxi is located, some 75% of all large and medium-sized industrial enterprises have resumed production on Tuesday, according to local media reports.
But a nickel price decline over the past month is putting pressure on the stainless steel market, sources said.
The three-month nickel contract on the London Metal Exchange ended Wednesday’s trading session at $12,775-12,780 per tonne, down $1,585-1,590 per tonne from January 16’s $14,360-14,370 per tonne - its highest price so far this year.
Fastmarkets’ weekly price assessment for stainless steel cold-rolled coil 2mm grade 304 domestic, ex-whs China in the country’s major market of Wuxi was 14,000-14,500 yuan ($1,995-2,066) per tonne including value-added tax on Wednesday February 19, narrowing by 200 yuan per tonne on both ends from 13,800-14,700 yuan per tonne a week earlier.
Some sellers lowered their prices from 14,600-14,700 yuan per tonne to 14,400-14,500 yuan per tonne to stimulate buying interest.
But others raised their prices from 13,800-13,900 yuan per tonne to 14,000-14,100 yuan per tonne on expectations of demand recovering gradually over the next month or two.
“With the virus infection rate dropping, more companies are willing to start work. This will push up stainless steel demand,” a trader in Wuxi said.
A total of 394 new confirmed cases of infection were reported on Wednesday, down sharply from 1,749 cases a day earlier, according to data released by China’s National Health Commission.
Fastmarkets’ weekly export price assessment for stainless steel cold-rolled coil 2mm grade 304, fob China was $1,830-1,880 per tonne on Wednesday, down by $10 per tonne from $1,840-1,890 per tonne a week earlier.
Chinese stainless CRC was sold at $1,850-1,860 per tonne fob during the week.
Export offers for Chinese stainless CRC were heard at $1,840-1,880 per tonne fob, or about $1,860-1,900 per tonne cif East Asia.
Sources told Fastmarkets that ongoing negotiations for Chinese stainless steel exports were mainly for forward shipments and not spot cargoes.
This is because of logistical bottlenecks arising from travel and transportation restrictions imposed by various Chinese cities and provinces, a trader in northern China said.
Chinese employees who have travelled abroad or to other provinces within the country have to be quarantined for 14 days upon returning to their respective workplaces. This has resulted in a shortage of labor in the logistics sector, particularly truck drivers.
Fastmarkets’ weekly export price assessment for stainless hot-rolled coil grade 304, fob China was $1,730-1,780 per tonne on Wednesday, also down by $10 per tonne from $1,740-1,790 per tonne on February 12.
Chinese stainless HRC was available at $1,750-1,790 per tonne fob, or about $1,770-1,810 per tonne cif East Asia.
“Stainless steel prices are expected to continue to fall because inventory levels at some mills have grown to a point that forces them to lower production rates,” a steel processor source in eastern China said.
The fallout from the coronavirus outbreak in China have also led to concerns among market participants in other parts of Asia.
Chinese-owned companies in the region may be facing labor shortages if they have large numbers of Chinese employees, an industry source in Southeast Asia said.
This could result in reduced stainless steel production as well as softer end-user demand, he added.
Fastmarkets’ weekly import price assessment for stainless steel cold-rolled coil, Asia grade 304 (2mm 2B), cif East Asian port was $1,830-1,880 per tonne on Wednesday, up by $20 per tonne from $1,810-1,860 per tonne on February 12.
Fastmarkets' weekly price assessment for stainless steel hot-rolled coil Asia grade 304, cif East Asia port was $1,730-1,780 per tonne on the same day, up by $20 per tonne from $1,710-1,760 per tonne a week earlier.
Taiwanese stainless CRC was offered at $1,880-1,900 per tonne cif during the week, while stainless HRC from the island was available at $1,780-1,800 per tonne cif.
Stainless CRC from Southeast Asia was offered at $1,850-1,950 per tonne cif East Asia while stainless HRC from the same region was available at $1,750-1,850 per tonne cif.
Buyers have shown interest in materials of other origins with shorter delivery times to make up for any shortfall in the event of shipments from China being delayed, a trader in Southeast Asia said.
China’s stainless steel market saw some activity over the past week following several weeks of stagnation as a result of the novel coronavirus (2019-nCoV) outbreak in the country.