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China's Stainless Steel Majors Cutting June Production?
There is speculation that China's major stainless steel manufacturers may have opted for June production cutbacks at their works toward a recovery of domestic market conditions for stainless steel products.

In this connection, Jiuquan Iron & Steel Group Co and other stainless steel manufacturers are said to have voiced their intentions of reducing what they produce. It is understood, however, that Taiyuan Iron & Steel Group Co (Tisco) remains mum about any cutback in its production. Tisco represents the largest company in China's stainless steel industry.

Some of China's stainless steel majors hinted in May that they might reduce their production for the month under review. After all, though, the stainless steel majors executed production at capacity as a whole in May.

China's stainless steel market for nickel-based CR sheets declined to below Yn20,000/ton (US$2,941) after tax last week. Meanwhile, Tisco set its sales price of Ni-based CR sheets at Yn21,600/ton (US$3,176) after tax last week, a fall of Yn4,520 (US$665) from the company's April quotation of Yn26,120/ton (US$3,841).

In the Wuxi area, distribution stocks of stainless sheets (CR and HR products) totaled 255,000 tons as of June 10, up from a level of 240,000 tons in May. The increased stocks were believed to stemmed from deteriorated cash flows among stainless steel distributors in the wake of the central government's credit restrictions. The distribution stocks fell off to 244,000 tons in total as of June 21.

China's domestic transaction prices of Ni-based stainless CR sheets amount to a deep "cave-in" in comparison with what is predominant in the West, experts point out. In the USA, the current prices are around US$3,900/ton, a price level that will still stand at US$3,600/ton in July even after a decline of US$300 to meet a revision of the nickel surcharge. In Europe, the June benchmark price is settled at 3,200 euros/ton. The benchmark will still stand at a level of 3,000 euros/ton in July even after a nickel surcharge adjustment by 150 euros.
last modified : Fri 02 Jul, 2010 [10:02]
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