China’s domestic stainless steel prices surge to 10-year high

China’s domestic stainless steel prices surged rose sharply over the week to Wednesday September 23 amid tight supply and steady demand.

Stainless steel cold-rolled coil 2mm grade 304 domestic (Wuxi): 21,800-22,500 ($3,370-3,478) per tonne, up by 2,800 yuan per tonne from a week earlier

Prices have risen to their highest since September 2011.

Jiangsu province, a major stainless steel production hub, on Sunday released a notice about lowering industrial energy consumption and emissions. Among other things, local authorities told industries that their electricity consumption must not exceed that of the corresponding period of last year.

The measure was implemented on the same day and the notice did not specify an end date.

Guangdong province, a second production hub, also implemented similar measures from September 16, according to a notice from the provincial government.

The electricity caps resulted in stainless steel mills lowering their production rates.

The production of nickel pig iron, a raw material for stainless steel, is also affected, sources said.

The production cuts resulted in spot prices for stainless steel surging upward over the past week.

“Some buyers are actively buying because they think supply will continue to drop in the reminder of this year,” a trader in Wuxi said.

Others are cautious about booking large quantities of stainless steel because of weakening nickel futures on the London Metal Exchange.

The three-month nickel contract on the London Metal Exchange ended the official trading session on Wednesday at $19,045-19,050 per tonne, down by $780-790 per tonne from $19,825-19,840 per tonne a week earlier.

Stainless steel cold-rolled coil 2mm grade 304 export: $3,560-3,580 per tonne fob China, up by $310-390 per tonne
Stainless hot-rolled coil grade 304 export: $3,430-3,440 per tonne fob China, up by $290-300

“The sharp domestic price increases pushed up export offers, but buyers have yet to accept them,” an exporter source in eastern China said.

A second exporter source in the region side: “My customers are expecting the delivery of cargoes in the next few weeks, so they are waiting for China’s prices to stabilize before they book new material.”

Stainless steel cold-rolled coil 2mm grade 304 import: $3,590-3,610 per tonne cif East Asia, up by $310-360 per tonne
Stainless steel hot-rolled coil grade 304 import: $3,460-3,490 per tonne cif East Asia, up by $520-530 per tonne

Indonesian stainless steel mills did not issue offers over the past week. A week earlier, prices for Indonesian stainless CRC were at $3,300-3,310 per tonne cif East Asia while those for stainless HRC from the same country were at $2,940-2,960 per tonne cif.

China offered stainless CRC at 3,590-3,610 per tonne cif and stainless HRC at $3,460-3,490 per tonne cif to East Asian buyers in the first three days of this week.

Buyers did not submit any bids and are taking a wait-and-see approach, sources said.

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