FOCUS: Chinese stainless steelmakers withhold offers to cause supply squeeze

Chinese stainless steel producers have withheld their offers since late last week and this has resulted in a recent surge in prices, multiple sources told Fastmarkets this week.

Stainless steel mills including a major privately-held steelmaker resorted to a supply shock to arrest a rapid decline in prices after futile attempts to court customers with price discounts, a stainless steel trader in northern China told Fastmarkets on Wednesday April 15.
Integrated producers were already on the brink of incurring losses last week amid the Covid-19 pandemic that has resulted in a sharp fall in demand and precipitated plunging stainless steel prices.
Market participants said any further reduction in asking prices would push mills below their break-even point, especially with many anticipating a recovery in nickel feedstock prices after the Philippines' top two nickel miners, Nickel Asia Corp and Global Ferronickel Holdings, were forced to suspend their operations in adherence to their country's Covid-19 restrictions.

Accumulated nickel inventory is quickly being consumed following the recent restart of the Chinese economy and there are concerns that nickel prices would soar...

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