SHANGHAI, Oct 11 (SMM) - According to SMM survey, the domestic stainless steel output totalled 2.76 million mt in September, up 21.10% MoM and 29.52% YoY. The output of 200 series stainless steel increased 12.58% from the previous month to 859,000 mt in September, that of the 300 series rose 23.84% MoM to 1.52 million mt, and that of the 400 series stood at 379,500 mt, up 31.95% on the month.
Most domestic steel mills saw significant increases in the September output, while Indonesian stainless steel production shrank during the same period. Specifically, the output of 400 series stainless steel saw the most aggressive increase among all. However, the demand for 400 series from white goods and infrastructure sectors has not yet recovered significantly, thus the inventory of 400 series accumulated slightly. The transactions of 200 series and 300 series improved compared with the previous month, leading to slightly falling inventories.
The national output of 200, 300, and 400 series stainless steel in October is expected to increase further on the grounds that most steel mills have resumed the production in September. In particular, the main increase will be contributed by some large steel mills and new projects, while small and medium-sized enterprises will remain conservative in scheduling the production. Indonesian stainless steel production is estimated to edge higher slightly. To be specific, the output of 200 and 300 series stainless steel is likely to see palpable increases because the profit margins for these two products still remain. However, the increase in 400 series output is forecast to be limited in October because the costs of raw materials, such as ferrochrome and plain carbon steel scrap, stay elevated, while the in-plant inventory and social inventory are dropping quite slowly. In terms of demand, it is expected that demand for stainless steel will not be as robust as it was in the Octobers of previous years. Nevertheless, varied bullish macro policies will be rolled out across the country in October this year, and the actual effect remains to be seen until they are implemented. Generally speaking, the overall supply and demand of stainless steel are on the rise. The costs have supported firm prices, but the upward room is constrained with sufficient supply. Therefore, SMM believes that the prices of stainless steel will face downward pressure in October.
