Weekly

Make sure you are on track with market dynamics every week.

304 SS Prices Jump US$57/MT Post-Holiday Opening | Stainless Insights in China

October 09 , 2024

 

Stainless Insights in China (October 1st - 8th)

 

The latest and awkward situation is that after October 9th, the investment and enthusiasm have started to fade away. On October 9, China's three major A-share indexes opened lower, with the Shanghai Stock Exchange Index falling nearly 7% at one point. The Hong Kong stock market hit its biggest decline and highest trading record ever.  


304 Stainless Steel Prices Surge by US$57/MT on the First Trading Day After the Holiday.

 

During the A-share market holiday, the Nasdaq China Golden Dragon Index (October 1-4) rose by more than 11%, and the Hang Seng Index (October 2-7) rose by 9.3%. Notably, the Hang Seng Index has risen by more than 35% year-to-date, leading the global market.

 

After the holiday, the bullish effect of stocks and commodity futures was released again, and stainless steel futures opened significantly higher, with the main contract reaching a high of US$2175/MT. As of the close, the main contract closed at US$2130/MT, up US$31.5 from the previous trading day, an increase of 1.6%. Spot prices also followed suit, with steel mills raising their opening prices by US$86-US$100/MT, and prices rising sharply.

 

 

In terms of stainless steel spot prices, early morning inquiries showed that the main base price of four-foot cold-rolled 304 in the Wuxi region was US$2095/MT, an increase of US$65/MT from the previous trading day; the price of hot-rolled stainless steel was US$2060/MT, an increase of US$57/MT from the previous trading day.

 

On the first trading day after the holiday (October 8), after the market opened higher, it fluctuated and adjusted. Traders and steel mills had a strong atmosphere of price increases and shipments, and market calls for price increases continued! In the afternoon, some cold-rolled 304 merchants offered discounts to ship goods, and the main quotation was US$2090/MT; most of the hot-rolled remained stable, and some agents reduced their prices by US$7/MT to US$2050/MT for shipment. The overall transaction atmosphere was acceptable, and some traders maintained firm quotations and remained optimistic about the future.

 

With the boost of favorable policies, the securities and commodity markets have risen sharply recently. After the holiday, the Shanghai Composite Index continued to rise, reaching a high of 3,674.41, and closed up 4.59% at 3,489.78. The stock market has seen six consecutive trading days of volume increases, with a total turnover of US$500 billion, setting a new historical high.

 

Overall, with the continuous release of favorable macroeconomic policies, the investment market has maintained its upward momentum, and stainless steel futures and spot prices have followed suit. It is expected that the spot price of cold-rolled 304 will maintain a fluctuating and strong trend in the short term, and the focus will be on the continued strength of market purchases and inventory reduction.

 


Other Relevant Information:

 

1.Vale's Short-Term Nickel Mine Production Reduced.

 

It was reported on the evening of October 6th that Vale submitted a document to the securities exchange, disclosing the operational disruption of its Onça Puma nickel mine in Pará State due to strong winds. The strong winds not only damaged the local power transmission network but also forced Vale to suspend production at the nickel mine, dealing a significant blow to the company's short-term production plan. Vale stated in the document that due to the severe damage to the power transmission network, the company had to temporarily suspend operations at the Onça Puma nickel mine. Preliminary estimates suggest that this incident will reduce its fourth-quarter nickel production by 1,500 to 2,000 tons. The company emphasized that although production will be affected in the short term, this is not enough to change its full-year production forecast range of 153,000 to 168,000 tons. This statement not only reflects Vale's confidence in its full-year production plan but also demonstrates its ability and determination to deal with unexpected situations.

 

2.Tsingshan to Reduce Nickel Production in Indonesia.

 

Due to the ongoing nickel ore shortage in Indonesia, Tsingshan, China's largest nickel producer, has reduced its production in Indonesia due to delays in mining quota approvals, leading to a continuous shortage of ore. The scarce ore supply has pushed up production costs; at the same time, the shortage caused by slow permits has also acted as a catalyst, forcing Indonesian smelters to import ore from the Philippines, the second-largest nickel producer.

 

3.Steel Industry PMI Index Up 8.6% in September.

 

According to the latest PMI data for the steel industry released by the China Federation of Logistics and Purchasing Steel Logistics Professional Committee, the index reached 49% in September 2024, a significant increase of 8.6 percentage points from the previous month, successfully ending the previous three-month decline. From the perspective of sub-indexes, the demand for the steel market showed a good improvement, and steel mills' production activities also rebounded. At the same time, the decline in raw material prices began to slow down, while steel prices rebounded in a fluctuating manner.

 

 

Market Dynamics
[2024-12-18] Stainless Insights in China | China’s Stainless Steel Crude Steel Output May Exceed 40 Million Tons in 2024 [2024-12-11] Stainless Insights in China | Stainless Steel Prices Hit a New Low in the Past Four Years [2024-12-04] Stainless Insights in China | Stainless steel prices hit new low for 2024 [2024-11-27] Stainless Insights in China | Until October 2024, India, Vietnam, and Türkiy are the top buyers of Chinese stainless steel.