Jaway Stainless Steel

China Stainless Steel Market to Rebound at Late June And July 2011

China stainless steel market started to fall at mid February and bottomed at late May and June, which is likely to rebound at mid and late of June, reasons are as follows:

1)      For now, the bottom line of steel mills’ manufacturing cost of CR products hits CNY 23,000-23,500 per tonne and that of HR products reaches CNY 21,000-21,500 per tonne. Steel mills intended to limit delivery to adjust production ratio. Some steel mills decide to cut production in June, thus, supply of some individual kinds of stainless steel will enter into tightness at late June.

2)      Steel makers’ production cut to some degree will ease pressure from stainless steel social inventory.

3)      Energy saving and power consumption limitation policy restrain stainless steel capacity release in Jiangsu and Zhejiang provinces, meanwhile, it also affects ferroalloy production in Yangtz River delta, increasing steel mills’ cost.

4)      Downstream end users have accepted the price of CNY 23,000-23,500 per tonne, which approaches to their bottom line.

5)      American economic policy is becoming clear in June, thus, bulk commodities price trend will be clear too.

6)      Traders feel depressed in the past half year, however, clear economic policy will drive them to speculate in the market.