China’s domestic stainless steel market waits for stimulus package

China’s domestic stainless steel prices were flat over the week ending Wednesday July 19 amid weak demand, but some participants expected the central government to release stimulus policies for manufacturers to push up stainless steel demand

Domestic steel market

Fastmarkets’ price assessment for stainless steel cold-rolled coil 2mm grade 304 domestic, ex-whs China was 14,700-14,800 yuan ($2,048-2,062) per tonne on Wednesday, unchanged from July 12. The prices stopped tumbling the week of July 12 in the wake of rising nickel prices on the London Metal Exchange.

China will expand the investment of medium- and long-term loans in the manufacturing industry to create a favorable environment for private enterprises. The National Development and Reform Commission (NDRC) made the statement in its July news press conference.

The NDRC did not release detailed measures with regard to aiding manufacturers and private companies in recovery.

“Market participants are waiting for these measures so they can regain their confidence in the stainless steel market,” a trader source in Wuxi said.

Over the past week, stainless steel demand remained weak, but prices failed to drop; they were supported by steady raw material prices – such as nickel pig iron – sources said.

For instance, Fastmarkets’ price assessment for nickel pig iron, high-grade NPI content 10-15%, spot, ddp China was 1,050-1,070 yuan per nickel unit tonne on July 14, unchanged from a week earlier.

Export demand in steel market

Fastmarkets’ price assessment for stainless steel cold-rolled coil 2mm grade 304 export, fob China was $2,130-2,160 per tonne on Wednesday, unchanged from July 12.

Fastmarkets’ price assessment for stainless hot-rolled coil grade 304 export, fob China was $2,030-2,050 per tonne on Wednesday, unchanged from July 12.

Export demand remained soft over the past week, although prices were supported by the appreciating yuan.

The exchange rate dropped 7.14 yuan to $1 from Saturday to Monday, compared with 7.25 yuan to $1 on July 1.

“Although market participants expect the US Federal Reserve will be mild at raising interest rate, it’s still hard to predict the trend of exchange rate. As a result, exporters haven’t reduced their prices despite the stronger yuan,” an exporter source in east China said.

Other exporters planned to maintain their prices and wait for customers’ bids over the rest of the week.

Cautious steel import market

Fastmarkets’ price assessment for stainless steel cold-rolled coil, Asia grade 2mm grade 304 (2mm 2B), cif port East Asia was at $2,050-2,100 per tonne on Wednesday, down by $30-50 per tonne from $2,100-2,130 per tonne on July 12.

Fastmarkets’ price assessment for stainless steel hot-rolled coil Asia grade 304 import, cif port East Asia was at $1,930-1,980 per tonne on Wednesday, down by $50-60 per tonne $1,990-2,030 per tonne on July 12.

East Asian buyers received lower offers from Indonesian stainless steel exporters over the past week, but buyers remained quiet because prices weren’t attractive enough.

For instance, the prices of stainless HRC were around $1,950 per tonne CIF China, while the domestic prices were equivalent to $1,990 per tonne ex warehouses.

If the imported cargoes were declared and shipped to China domestic rerolling mills, the cost would have been $2,204 per tonne, including 13% of value-added tax.

Taiwan-based exporters said the region’s rerolling mills were cautious about importing stainless HRC because they had received fewer orders from the Europe and the US.

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