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Weekly Average Price|| Stainless Steel Market Summary in China (9th, Mar. – 13th, Mar.)


304/2B: The average price of 2.0*1219*C (slit edge) of ZPSS in the Wuxi market is US$1,905/MT(plus taxes) which is US$32/MT lower than last week and the declining percentage is 1.56%. Besides, the average price of 2.0*1219*C(slit edge) in the Foshan market is US$1,945/MT(plus taxes) which is also US$32/MT lower than last week and the declining percentage is 1.52%.

304/2B: This week, the average price of 2.0*1240*C(mill edge) of Hongwang in the Wuxi market is US$1,760/MT(plus taxes) which is US$61/MT lower than last week and the declining percentage is 3.19%. What's more, the average price of 2.0*1240*C(mill edge) in the Foshan market is US$1,740/MT(plus taxes) which is US$40/MT lower than last week and the declining percentage is 2.93%.

304/No.1: The average price of 4.0*1520*C (mill edge) of ESS in the Wuxi market is US$1,695/MT(plus taxes) which is US$23/MT lower than last week and the declining percentage is 1.29%. Furthermore, the average price of 4.0*1520*C(mill edge) in the Foshan market is US$1,730/MT(plus taxes) which is US$30/MT lower than last week and the declining percentage is 1.65%.

316L/2B: This week, the average price of 2.0*1219*C of TISCO in the Wuxi market is US$2,775/MT(plus taxes) which is US$52/MT lower than last week and the declining percentage is 1.72%. Moreover, the average price of 2.0*1219*C(slit edge) of TISCO in the Foshan market is US$2,825/MT(plus taxes) which is US$52/MT lower than last week and the declining percentage is 1.68%.

316L/No.1: This week, the average price of 4.0*1500*C(mill edge) of ESS in the Wuxi market is US$2,500/MT(plus taxes) which is US$39/MT lower than last week and the declining percentage is 1.44%. What's more, the average price of 4.0*1500*C(mill edge) in the Foshan market is US$2,540/MT(plus taxes) which is US$38/MT lower than last week and the declining percentage is 1.36%

201/2B: This week, the average price of 1.0*1219*C(mill edge) of the Wuxi market is US$1,075/MT(plus taxes) which is US$16/MT lower than last week and the declining percentage is 1.45%. Besides, the tax-inclusive average price of the Foshan market is US$1,060/MT(mill edge) which decreases by US$12/MT compared to last week and the declining percentage is 1.08%.

J2, J5/2B: The average price of 1.0*1219*C(mill edge) of the Wuxi market is US$1,020/MT(plus taxes) which is US$13/MT lower than last week and the declining percentage is 1.26%. Besides, the tax-inclusive average price of the Foshan market is US$1,015/MT(mill edge) which decreases by US$16/MT compared to last week and the declining percentage is 1.54%.

430/2B: The average price of 2.0*1219*C(slit edge) of TISCO in the Wuxi market is US$1,115/MT(plus tax), which is US$7/MT lower than last week and the declining percentage is 0.64%. The average price of 2.0*1219*C(slit edge) in the Foshan market is US$1,115/MT(plus taxes) which decreases by US$16/MT compared to last week and the declining percentage is 1.39%.


What happened to 304 in 2008 won’t repeat in 2020.



The recent stainless steel market has subdued, panic attacks on the traders, afraid of the pandemic dragging the stainless steel market back to the 2008 financial crisis. Over the past week, US stock has been in a downturn and Washington will entail $700 billion in asset purchases which is like a copy of the 2008 QE policy by US Federal. People are concerning whether the stainless steel repeats its steps like that in 2008. 




What happened to the stainless steel market in 2008?
 
Price trending of 304/2B in 2008 (Unit: $/ton)

Checking out the price database, the stainless steel price kept sinking during the entire 2008, dropping from $4,315/ton at the beginning of the year to $2,335/ton at the end of 2008. The margin of the 2008 stainless price change reached $2,208/ton!



Between late September and October 2008, stainless steel price crashed and knocked off $924/ton within one month. What happened? The reason is the notorious financial crisis. From September of 2008, the market started to lose control, leading to the collapse of several giant financial institutions, and at the same time, the stock and commodity market plunged dramatically. LME(nickel) had decreased by $10,000 during 3 months, from $20,000/ton to S10,000/ton. 
 

History is a cycle. What about now?

Limit decreasing possibility 
 
Thinking of 2008, the drop began at a price of around $4,000/ton, but now, the average price of 304/2B (4-feet slit edge) is only $1,685/ton. There is less decreasing space for stainless steel prices.

Analyzed from the cost, for now, the lowest price of high nickel-iron is $101/nickel, and the lowest price of high carbon ferrochrome is $736/50 base tons, so the cheapest producing cost is $1,520/ton. The price of 304 cold rolled is around $1,530/ton which is the lowest price of 2016. However, raw material prices are still strong. High nickel-iron is pricing at $133/nickel, and high carbon ferrochrome is $794/50 base tons.

Therefore, the price of stainless steel has already dropped to the bottom. Dropping over $2,000/tons like 2008 seems impossible. 

The Eastern China market is in shortage of stock.
 
According to the inventory data, the stainless steel inventory of the Wuxi market is increasing but the speed is slowing down. Most of the increase comes from the mills’ lead stock which increases by 5.6 thousand tons to 311.9 thousand tons. But the traders’ inventory decreases by 3.8 thousand tons, falling to 330.5 thousand tons.

The inventory keeps reducing, that’s why many traders of the Wuxi market are unwilling to cut the price. Another reason is that some goods of specific specifications are in the sellers’ market. Most of the traders are still confident in the price now.

Another opinion believes that there is no need to compare to the 2008 stainless steel market because the price tells that the declining space is too small to drop.

Anyway, the biggest worry for enterprises is not the price risk but the risk to maintain steady operation and management. To retain the currency flow and control the operation risk, are a great challenge for all enterprises to survive in this wave.

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