SHANGHAI Stainless steel
market participants in Chinas stainless steel hub of
Wuxi, located some 87 miles from Shanghai, are relatively
downbeat amid a lull in the market following a modest round of
buying after the Chinese New Year.
While sales to end-users
starting in late February have been reported as reasonably
good, prices have fallen slightly and stocks in Wuxi are
starting to rise again.
While demand from some
sectorsnotably elevator producers, construction and
manufacturinghas picked up, customers in these areas are
buying cautiously, market participants said.
"Sales since late February have
been fairly strong, although prices havent changed a lot
due to the high inventory," one stainless distributor said.
"Our sales in the first two weeks of March reached the same
level as in the peak season in past years."
Subsidies on purchases of home
appliances in rural areas ended Jan. 31, keeping a lid on
Purchasing activity has also
dried up because buyers fear a continued decline in prices.
"End-users are unwilling to buy
more since they think the price may go down further," the
stainless steel distributor said. Mills are, therefore, likely
to pull back their list prices, having tried to prop up the
market with price increases over the past few months.
As inventories rise and buying
continues to slip, mills are still churning out steel.
stainless export market has also lost ground.
Stainless flat product exports
fell to 133,837 tonnes in February, down 8.5 percent from
146,206 tonnes a month earlier, due to the Chinese New Year
holiday, Chinese customs data show.
The weeklong national break
during February delayed some shipments, traders told
AMM sister publication Steel First.
Exports to Chinas main
destinationsTaiwan and South Koreawere stable in
February, with Taiwan taking 50,093 tonnes, up 1.2 percent year
on year, and South Koreas intake rising 1.4 percent to
"Demand from Taiwans
pressure vessel and construction sectors is good," a mill
source in Zhejiang said.
However, weak demand from other
regions forced Chinese mills to give more discounts on export
"Mills are offering unusually cheap export prices, which
makes our own offers uncompetitive," according to a distributor
in Foshan, Guangzhou province.
A version of this article was first
published by AMM sister publication Steel