一、Indonesian steel mills adjust production schedule, supply pattern changes

Due to the dual considerations of cost control and market strategy adjustment, a large steel plant in Indonesia has recently made major production decision adjustments. The steel plant canceled the original planned production of 50,000 tons of 200 series stainless steel in May. At the same time, the production of 300 series stainless steel was also drastically reduced from 420,000 tons to 360,000-370,000 tons. This move caused an uproar in the international stainless steel market. As an important stainless steel production base in the world, Indonesia's production changes have a significant impact on the global supply pattern.

Coincidentally, another large steel plant in Indonesia also announced a shutdown plan, which will carry out a 2-month equipment maintenance and has now completely stopped production. Equipment maintenance is a necessary measure to ensure the long-term stable operation of the steel plant, but in the current market environment, its shutdown has undoubtedly further exacerbated the market's concerns about the supply of stainless steel raw materials. Indonesia occupies an important position in the global supply of stainless steel raw materials, and its production of key raw materials such as nickel iron accounts for a high proportion in the international market. The actions of the two major steel mills are expected to significantly reduce the supply of stainless steel raw materials from Indonesia in the international market in the short term, which will in turn affect the price trend.

二、Global stainless steel production is high, and inventory pressure is prominent

Although some steel mills have slightly reduced production due to squeezed profit margins, from a global perspective, the overall output of stainless steel is still at a historical high. According to statistics from the China Iron and Steel Association, in the first quarter of 2025, the national crude stainless steel output reached 9.6242 million tons, an increase of 599,300 tons compared with the first quarter of 2024, a year-on-year growth rate of 6.64%. Among them, the output of Cr-Ni stainless steel was 4.9452 million tons, an increase of 186,000 tons, an increase of 3.91%, but its share in the total output was 51.38%, a year-on-year decrease of 1.35 percentage points. As the mainstream variety in the market, the output of 300 series stainless steel remains at a high level.

While the output remains high, the inventory problem is becoming increasingly serious. Taking the social inventory of stainless steel in major markets as an example, the latest inventory data released by MYSTELL shows that the total social inventory currently remains at around 1.11 million tons. At the beginning of the year, many steel mills were optimistic about the market and expanded their production plans. However, market demand did not grow as expected, resulting in a substantial increase in social inventory. In the context of the current traditional consumption off-season, the inventory digestion speed is extremely slow, which not only reflects the continued existence of market supply pressure, but also further aggravates the imbalance between supply and demand in the market, forming a huge obstacle to the rise in stainless steel raw material prices.

三、Demand is weak and market confidence is frustrated

Recently, the downstream demand for stainless steel has not been well released. With the arrival of the plum rain season in some areas, the expectation of marginal weakening of demand has further increased. Relevant data show that the apparent consumption of rebar this week is 2.4713 million tons, a decrease of 131,600 tons from the previous month. The daily average transaction of construction steel is 95,300 tons, a decrease of 13.33% from the previous month. Frequent rainfall in many parts of the country has had a significant inhibitory effect on terminal demand such as construction. As one of the important application areas of stainless steel, the decline in demand in the construction industry has directly affected the consumption of stainless steel.

From a broader market perspective, the uncertainty of global economic growth and the rise of trade protectionism have also had an impact on the demand for stainless steel. In international trade, the continuous increase in trade barriers such as changes in tariff policies and anti-dumping investigations has made the import and export of stainless steel products face many difficulties, which in turn affects the purchasing enthusiasm of downstream companies. For example, some countries have imposed high tariffs on imported stainless steel products, resulting in a sharp increase in import costs. In order to control costs, downstream companies have to reduce procurement or look for alternative materials. This situation is prevalent around the world, seriously weakening the market demand for stainless steel raw materials.

四、Raw material prices fluctuate and cost support is unstable

Among the raw materials for stainless steel, the price fluctuations of raw materials such as ferronickel and ferrochrome have a crucial impact on production costs. Recently, Indonesia has a strong willingness to support prices at the mining end, and the tight supply situation has kept the price of ferronickel at a high level. However, Indonesian iron mills are currently making losses across the board and have no quotations, and most transactions are based on long-term contracts. Some traders offer prices of 960-970 yuan/nickel (bottom tax included). On May 19, the second round of high-nickel iron bidding price in May of a large steel mill was 940 yuan/nickel (bottom tax included), and a total of 10,000 tons were traded. Large steel mills continue to suppress the price of ferronickel, which gradually weakens the cost support of stainless steel.

The price of ferrochrome has recently shown a stable but weak trend. The mainstream quotation of domestic high-carbon ferrochrome remains at 8,000-8,200 yuan/base ton. The price of scrap stainless steel has also shown a slight decline. Overall, the fluctuation of raw material costs has weakened the support for stainless steel production costs, which not only limits the room for stainless steel prices to rise, but also increases the difficulty of cost control for stainless steel manufacturers. For manufacturers, how to reasonably arrange production and optimize procurement strategies under the condition of raw material price fluctuations has become an urgent problem to be solved.

五、The European stainless steel industry faces a structural crisis

According to foreign media reports on May 24, 2025, Kallanish reported that due to seasonal downturns and weak prices, the market conditions for stainless steel production are not expected to improve in the coming months, and the industry is expected to face major difficulties in 2025. The latest analysis of the "Stainless Steel Mirror" released by the International Bureau of Stainless Steel and Special Alloys (BIR) pointed out that Indonesia's "dimensionality reduction strike" formed by its cost advantage has plunged the European stainless steel industry chain into a structural crisis.

The European market is currently under full pressure. Jost Van Cleef, chairman of the BIR Stainless Steel Committee and representative of Oryx Stainless, clearly pointed out that due to weak seasonal demand and continued low prices, the stainless steel market is unlikely to show signs of recovery in the coming months. Ruggiero Rico, executive director of Nichel Leghe, Italy, said bluntly: "The current market has not seen a bottoming signal, and the sluggish domestic demand in Europe is triggering vicious price competition." Data shows that the entire European stainless steel industry chain has suffered a comprehensive impact, with both the volume and price of the plate and long product markets falling, the prices of hot-rolled coils and their derivatives continuing to bottom out, and factory inventories generally high.

The cost of stainless steel products produced by Indonesia using the nickel pig iron process is nearly 30% lower than that of the traditional process based on scrap steel smelting in Europe, forming a crushing competitive advantage. "While European steel mills are still paying complex costs for each ton of scrap steel, Indonesian products have penetrated the market with the sword of price." Rico revealed that the cumulative decline in scrap steel prices in the EU over the past six months exceeded 15%, and the spot price of 304-grade stainless steel scrap is approaching the psychological barrier of 1,200 euros/ton (about 1,355 US dollars). The industry expects that it will fall below this support level in June. This intercontinental industrial game has triggered the restructuring of the European industrial chain. Many companies have confirmed that they are re-evaluating their raw material strategies and considering using nickel pig iron to replace scrap steel or directly importing steel billets. Analysis points out that although the EU is trying to resist Asian products through tariff barriers, producers such as Indonesia continue to penetrate the European market through re-export trade. Industry observers warn that if Europe cannot break through technical bottlenecks and reduce production costs as soon as possible, its century-old stainless steel industry system may be fundamentally shaken. As global production capacity accelerates its transfer to Southeast Asia, this industrial change may give rise to a new world stainless steel industry pattern before 2025.

The international stainless steel raw material market has faced many challenges and variables in the past two weeks. Adjustments on the supply side, weak demand, fluctuations in raw material prices and regional industrial crises together constitute the current complex market landscape. For industry practitioners, paying close attention to market trends and flexibly adjusting business strategies will be the key to responding to market changes and seizing development opportunities.