Demand for stainless market in China and Japan shrinks
Although we have entered a new year, the Asian stainless steel market continues to face challenges. Consumer confidence remains low due to ongoing economic uncertainties, leading many to adopt a cautious approach. As a result, demand across the region remains weak, with little sign of improvement in the near term.
While the development of the stainless steel industry varied across Asia last year, both China and Japan—two of the largest markets—have encountered similar issues this year: persistently weak demand. Most manufacturers report that consumers are hesitant to spend, which has put pressure on pricing and production strategies.
In China, the spot market has slowed in recent weeks due to the Spring Festival holiday, but this seasonal slowdown masks a deeper issue: insufficient demand. This lack of buying activity has caused internal disagreements among major producers. In January, some alloy producers considered implementing a surcharge mechanism to stabilize domestic prices, but no consensus was reached. While some mills proposed price increases for February, others argued for reductions. To address the demand gap, several Chinese steel mills announced a 40% month-on-month production cut. Despite the lack of agreement, cold-rolled 304 prices in January still rose by 150 yuan/ton, reaching 3,190 yuan/ton.
Meanwhile, in Japan, producers continued to lower prices in response to weak domestic demand and reduced surcharges from steel mills. Japanese manufacturers are also feeling the ripple effects of U.S. economic instability, as orders from North American end users have declined. Wholesalers and traders are struggling, with inventory levels not high, but sales remaining difficult due to elevated prices. Although domestic prices fell by 520 yen/kg in January—10 yen/kg lower than in December—wholesalers expect to face more challenges ahead.
In contrast, the stainless steel market in other parts of Asia shows stronger performance. Taiwan’s Uican Steel, for example, announced a price increase in January, citing solid demand. The previous reduction in production has already started to show results, and cold-rolled 304 prices in Taiwan were around TWD 135,500/ton in January.
Overall, the majority of the Asian stainless steel market is closely watching the end of the Spring Festival holiday, hoping that consumer activity will rebound. However, while there is optimism about a short-term recovery, long-term demand remains uncertain. For now, steel mills are holding out hope but not expecting a significant turnaround just yet.
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