China Stainless Steel Market Update

Market Update: Recent Trends in Raw Material Prices

Imported Iron Ore Prices Show Mixed Trends

Imported iron ore prices experienced slight fluctuations last week, with a subsequent decline in foreign prices translating to lower RMB-equivalent spot prices. Some large steel companies and traders opted to secure fixed-priced foreign resources, leading to a minor uptick in foreign transactions. Towards the latter part of the week, iron ore prices stabilized after an initial drop, particularly noticeable in lump ore and pellet ore. While port inventories decreased recently, upcoming port arrivals remain robust. Domestic steel companies saw minor fluctuations in blast furnace operation rates, with port inventories expected to stay high. Despite reports of production cut plans by some steel companies, those along the river and coast continue to maintain reasonable profit margins. Future forecasts suggest moderate fluctuations in iron ore prices.

Stable Outlook for Domestic Metallurgical Coke

Domestic metallurgical coke prices remained stable with a slight decline last week. Various regions, including East China, North China, Northeast China, and Northwest China, witnessed a second round of price reductions. Notably, wet quenched coke prices fell by 50 yuan/ton, while dry quenched coke prices dropped by 55 yuan/ton. Amidst tight supply conditions, most coke companies in key production areas expressed concerns over profitability, leading to joint efforts to resist further price cuts. Despite initial resistance from some parties, adjustments are expected to take effect by mid-June. The metallurgical coke futures market reflects higher prices compared to the spot market, suggesting stability in the near term.

Domestic Coking Coal Prices Remain Steady

Domestic coking coal prices showed stability with a slight decline, characterized by more frequent decreases than increases in online auction transactions. Prices for various types of coking coal in different regions saw adjustments, reflecting industry efforts to manage declining profitability and adjust purchasing behaviors accordingly. While some coal mines reported improved shipment rates post-price adjustments, further significant declines in coking coal prices are unlikely in the short term.

Ferroalloy Prices Show Marginal Declines

Last week, various ferroalloy prices maintained stability with marginal declines. Ferrosilicon prices, for instance, saw a decrease of 100-120 yuan/ton. Production data indicated a slight increase in output, with future production plans expected to impact market dynamics. Traders primarily focused on inventory management rather than aggressive purchasing, signaling a continued weak outlook for the ferrosilicon market. Meanwhile, silicon manganese prices exhibited initial gains followed by declines, reflecting broader market adjustments amidst stable ore prices.

High-Carbon Ferrochrome Market Remains Stable

High-carbon ferrochrome prices remained stable, buoyed by stable spot chrome ore prices and minimal production cost fluctuations. Despite high production costs, manufacturers refrained from lowering prices significantly due to high operational rates. Future projections suggest sustained stability in the high-carbon ferrochrome market in the immediate future.

Outlook for Vanadium and Molybdenum Alloys

In the vanadium alloys sector, ferrovanadium prices decreased while vanadium-nitrogen alloy prices saw increases. Despite a slight uptick in demand and reduced low-priced resources, constraints in electric furnace operation rates may limit substantial price increases. Conversely, the molybdenum alloys market exhibited stable prices, with recent bidding activities from steel companies supporting steady growth in the near term.

Conclusion

Overall, recent trends in raw material prices reflect a mixed landscape across various sectors. While some markets brace for stability amidst modest declines, others show resilience in the face of operational challenges and supply dynamics. Continued vigilance and strategic adjustments remain crucial for industry stakeholders navigating these fluctuating markets.