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The stainless steel futures prices continued to increase last week. The futures prices of steel mills and the spot guide prices rose to varying degrees. Spot prices also trended higher. Traders were inclined to restock goods amid low inventory and higher prices. As such, the transactions increased slightly amid rising prices.
The improvement in market demand is limited in the traditional off-season of consumption in December and January and the Chinese New Year holiday. It is difficult to sustain the replenishment demand born from price hike. On the supply side, many steel mills started the overhaul plan in December, which will continue until the Chinese New Year. The main reduction was in January, and the output of the 300-series stainless steel fell by about 250,000 mt. On the whole, stainless steel may show a weak supply and demand situation. The upstream offered support amid declining output and normal orders. But the production recovery of the stainless steel market is still driven by the improvement of downstream demand and continuous restocking. The 2202 stainless steel futures contract is expected to move between 16,000-17,200 yuan/mt this week.