Major stainless steel mills have decreased core product prices for January in response to low demand from the domestic market.
Taiyuan Iron and Steel Group Co. Ltd (TISCO) said last Friday that due to the bearish sentiment of the domestic stainless steel market, it would decrease the ex-works prices of 304 series hot-rolled stainless steel sheet and 304 series cold-rolled stainless steel sheet by RMB 2,500 ($342.47) to RMB 29,900 ($4,095.89) and RMB 31,900 ($4,369.86) a tonne respectively, effective 1 January.
Furthermore, the company cut the ex-works price of 316 series hot-rolled and cold-rolled stainless steel sheet by RMB 3,000 ($410.96) to RMB 54,300 ($7,438.36) and RMB 57,200 ($7,835.62) a tonne respectively, though increased the ex-works prices of 430 series hot-rolled and cold-rolled stainless steel sheet by RMB 100 ($13.7) from 1 January.
Other major stainless steel mills followed the same price adjustment policies as TISCO, including Baoshan Iron and Steel Group (Baosteel Group), Ningbo Baoxin, Zhangjiagang POSCO and Qingdao POSCO, according to announcements released by the companies yesterday.
However, domestic market prices have fallen far below the ex-works prices due to slack demand and high stockpiles. For instance, 304 series cold-rolled stainless steel sheet of 2.0 mm thickness traded in Shanghai on Wednesday at RMB 29,800 ($4,082.19) a tonne, RMB 2,100 ($287.67) or 6.58% lower than the ex-works price of RMB 31,900 ($4,369.86) a tonne offered by major steel mills.
Major stainless steel mills had previously agreed to cut production by 40% for the month of January to combat the falling prices of stainless steel products on the domestic market.
TISCO, the largest stainless steel coil in China, announced on Tuesday it produced 2.02 million tonnes of stainless steel in 2007, soaring 82.05%from last year. However, the figure was still lower than the 2.4 million tonnes the company estimated in early 2007, due to reduced production during the year.