1. Supply: high production schedule, inventory differentiation

According to Mysteel statistics, in February 2025, the crude steel output of 43 domestic stainless steel plants was 3.1453 million tons, a month-on-month increase of 283,800 tons, an increase of 9.92%. In March, the production was 3.5026 million tons, a month-on-month increase of 11.36%. The production of each series has increased to varying degrees. Although the total social inventory of stainless steel in the mainstream market in March was 1.0994 million tons in 89 warehouses, a week-on-week decrease of 1.97%, and the total inventory of 300 series stainless steel was 740,100 tons, a week-on-week decrease of 2.33%, on March 31, the Shanghai Futures Exchange stainless steel warehouse futures warehouse receipts were 200,762 tons, a month-on-month increase of 1,516 tons, reflecting that the market supply is still relatively sufficient.

2. Demand: Downstream recovery is slow, and purchases are mainly based on rigid demand

After the holiday, the recovery of downstream demand for stainless steel was lower than market expectations, consumption was relatively sluggish, and overall purchases maintained the rhythm of rigid demand. Real estate and infrastructure performance was relatively weak. From January to February, the sales area of new houses in 30 large and medium-sized cities increased by 2.7% year-on-year, and compared with the same period in 2023, the decline was more than 30%. However, the automotive and home appliance sectors have shown strong resilience. From January to February, my country's cumulative automobile sales reached 4.552 million units, up 13.2% year-on-year, of which the production and sales of new energy vehicles increased by 52% and 52% year-on-year respectively; in the first 8 weeks, the online and offline retail sales of air conditioners increased by 8.8% and 42.7% year-on-year respectively.

3.Cost: Tight raw materials, strong price support

Since February, affected by the production cuts and policy disturbances of Indonesian major factories, the center of gravity of nickel prices has moved up. In March, the CIF price of Indonesian nickel ore rose from US$42/wet ton to US$46/wet ton. As of March 12, the national average price of nickel iron (7%-10%) was 1,000 yuan/nickel point, up 5.8% from the end of last year. In terms of ferrochrome, a high-carbon ferrochrome enterprise in Inner Mongolia stopped production for maintenance, and a smelter in Inner Mongolia further reduced production by 30% and suspended spot purchases of chrome ore, driving costs to continue to rise.

4. Market dynamics: Enterprises actively deploy overseas production capacity

On the evening of March 21, Yongjin Co., Ltd. issued an announcement that it plans to jointly establish Jiada Turkey Metal Manufacturing and Trading Co., Ltd. with Lanhe Holdings and others to invest in the "annual processing of 400,000 tons of cold-rolled stainless steel strip project", with a total investment of approximately 1.868 billion yuan. In addition to the previous capacity layout in Vietnam and Thailand, Yongjin Co., Ltd. continues to expand its overseas business scale.