300 series inventory continues to decline, driven by stainless steel or other factors?

As of the close on May 23rd, the main stainless steel contract fell 0.68% to 14525 yuan/ton

In terms of nickel iron, the domestic factory price of high nickel iron has temporarily stabilized at 990-1000 yuan/nickel, and the supplier's quotation remains above 1000 yuan/nickel (factory tax included). Recently, Indonesia announced a quota of 217.6 million tons for RKAB approval, which is slower than the approval progress in March. The market still has expectations of tight nickel ore supply, and the high price of nickel ore in Indonesia has provided strong support for nickel iron prices.

In terms of ferrochrome, several steel mills' June high carbon ferrochrome steel bidding prices remained unchanged compared to the previous month. Among them, Qingshan Group's June high carbon ferrochrome long-term agreement purchase price was 8995 yuan/50 basis tons (cash including tax to the factory price), Shanxi Taiyuan Iron and Steel's June 2024 high carbon ferrochrome 50 basis tons including tax to the factory purchase price was 8795 yuan, and the recent Inner Mongolia high carbon ferrochrome natural block cash including tax factory transaction price was 8900 yuan/50 basis tons, with a transaction volume of 3 cars. It is expected that the ferrochrome market will remain stable in the short term.

According to Mysteel statistics, in May, 43 domestic steel mills produced 3.3403 million tons, an increase of 3.7% month on month. The production capacity of steel mills is still in a surplus state, but at present, the social inventory is at a moderate level, and the supply-demand contradiction is not particularly prominent. In the latest inventory statistics (May 23), the total inventory of 89 warehouses in China decreased by 3.71% on a weekly basis to 1.07 million tons. Among them, the inventory of 300 series decreased slightly, mainly due to the limited market arrivals this week and the maintenance of essential purchases by terminals, which allowed for narrow digestion of inventory.

Summary

Recently, stainless steel futures have been fluctuating at a high level due to the macro environment and the disturbance of the industry chain itself. From a fundamental perspective, stainless steel raw material prices are firm, inventory is at a moderate level, and short-term contradictions are not yet prominent, or may follow macro sentiment fluctuations. In the future, attention should be paid to the trend of raw material prices and changes in social inventory levels.