Nickel prices rose, why did the spot 304 stainless steel price pull back? From $2,280 on February 1 to $25,130 on February 22, Lun nickel has risen by nearly $3,000.

Nickel prices rose sharply, but domestic spot 304 stainless steel prices fell one after another. What is the reason why the spot price does not rise but falls?

1. The impact of the new fiscal and taxation policies:

The Caishui No. 40 document is about to be implemented, and the latest tax reform policy for the recycling industry is about to be introduced. The new fiscal and tax policies for the recycling industry are unclear. In order to avoid risks, speed up the pace of shipments and reduce inventories, most recycling companies' purchase price of Tsingshan molten steel fell by 600 yuan/ton on the 22nd.

2. Steel mill inventory increases:

At the end of January 2022, the inventory of 15 mainstream stainless steel plants in China was 1.153 million tons, a month-on-month increase of 4.48% and a year-on-year increase of 5.82%. Among them, 549,000 tons of 300 series, an increase of 8.97%.

Inventory stainless steel coil resources.

3. Downstream demand is slow:

Recently, affected by the international situation, the external nickel price is strong, the domestic downstream demand has not been released, and the stainless steel price is high, which makes many downstream customers discouraged and wait and see.

4. Spot inventory increases:

At the end of January, traders and downstream began to enter the holiday season, and most of the pickups stalled. After the start of construction, the spot goods arrived in Hong Kong one after another, and the downstream demand could not keep up. With the sharp increase in social spot inventory, some traders withdraw their funds at the end of the month, and the spot price drops, causing the price to drop.

Spot stainless steel coil processing

The reasons for the current decline in stainless steel prices are basically the above four.