By Fiona Lam / February 01, 2018 / www.metalbulletin.com /
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China's currency appreciation and rising nickel prices fueled gains in East Asia's stainless steel market over the past week.
Metal Bulletin's assessment of prices for benchmark 304 stainless 2mm cold-rolled coil was $2,250-2,300 per tonne cif East Asian ports for the week ended Wednesday January 31, up $100-150 per tonne from $2,100-2,200 per tonne cif
a week earlier.
Metal Bulletin's assessment of prices for benchmark 304 stainless hot-rolled sheet was $2,180-2,230 per tonne cif East Asian ports for the same period, up $130-230 per tonne week on week.
Deals involving small shipments of stainless CRC were concluded around $2,250-2,300 per tonne cif, according to market participants.
Offers for stainless CRC from Chinese mills, up until Wednesday this week, were at $2,250-2,350 per tonne cif, up $100-150 per tonne from $2,150-2,200 per tonne cif a week earlier, according to market sources.
Taiwanese stainless CRC was offered around $2,300 per tonne cif, up $100-120 per tonne week on week.
For stainless hot-rolled sheet, offers from Chinese mills came in at $2,180-2,210 per tonne cif, up $60-230 per tonne week on week. Taiwan-origin stainless hot-rolled sheet was offered at $2,230-2,250 per tonne cif.
Market participants think stainless hot-rolled sheet could change hands around $2,180-2,210 per tonne cif.
Rising nickel prices coupled with the stronger Chinese yuan and Taiwanese dollar led to higher stainless steel prices in East Asia during the week, market sources said.
The
three-month nickel contract on the London Metal Exchange ended the official trading session on Wednesday at $13,545-13,550 per tonne, up $545 per tonne week on week.
Nickel from the Philippines and Indonesia - which many Chinese mills use - is also in short supply because Southeast Asia's current rainy season is affecting mining and production there, a trader in Macau said.
"China's domestic stainless steel gains pushed export prices up as well," a trader in China's Jiangsu province said.
In the country's major Wuxi market, prices for 304 stainless CRC stood at 14,500-15,400 yuan ($2,302-2,445) per tonne including VAT on Wednesday, widening from 14,700-15,300 yuan per tonne a week earlier. Prices for 304 stainless hot-rolled coil were at 14,100-14,300 yuan per tonne including VAT on the same day, up 600-700 yuan per tonne week on week.
But demand remained soft due to the upcoming Lunar New Year break in mid-February, according to market participants.
"Several buyers were also surprised by the sudden price surge and so are taking a wait-and-see approach," another Jiangsu-based trader said.
But transactions were still concluded because some end-users cannot afford to wait for prices to fall, the Macau-based trader said. "They need to replenish their inventories to maintain market share," he added.
Although end-users typically shut their facilities temporarily ahead of the Lunar New Year, some in China are also stocking up in anticipation of further price increases after the February 15-21 holiday, according to the first Jiangsu-based trader.