Demand for stainless market in China and Japan shrinks
Although the new year has begun, the Asian stainless steel market continues to face common challenges. Consumer confidence remains low due to ongoing market uncertainty, leading many to adopt a cautious approach. As a result, demand across the region remains weak, creating a difficult environment for manufacturers.
Despite varying growth trajectories in the stainless steel industry across Asia last year, both China and Japan—two of the largest markets—have encountered similar issues this year: persistent weak demand. Most stainless steel producers report that consumers are reluctant to spend, which is putting pressure on pricing and production strategies.
In China, the spot market has slowed down recently due to the Spring Festival holiday, but this temporary lull does not change the underlying issue of insufficient demand. In fact, the lack of demand has caused internal disagreements among major Chinese stainless steel producers. Some companies have even considered adjusting prices through an alloy surcharge mechanism, but no consensus was reached.
While some mills are reportedly planning price increases in February, others argue that prices should be lowered. In response, several Chinese steel mills announced a 40% month-on-month reduction in production to try to stimulate demand. Although no agreement was reached on pricing, the domestic cold-rolled 304 price still rose by 150 yuan/ton in January, reaching 3,190 yuan/ton.
In Japan, stainless steel prices fell for the fifth consecutive month, driven by reduced surcharges from domestic mills and weak consumer demand. Japanese producers 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 daily losses, and despite relatively low inventory levels, it's hard for them to move products at current high prices. With domestic prices dropping by 520 yen/kg in January, the outlook for the Japanese market remains challenging.
Meanwhile, in other parts of Asia, the stainless steel market shows more strength. Taiwan’s Uican Steel, for example, announced a price increase in January, citing strong demand fundamentals. Production cuts made earlier in the year have already started to show results, and the cold-rolled 304 price in Taiwan stood at around TWD 135,500/ton in January.
Overall, the majority of the Asian stainless steel market is waiting for the end of the Spring Festival holiday, hoping that consumers will return to the market. However, whether this will lead to sustained demand remains uncertain. For now, steel mills are cautiously optimistic but do not expect a significant turnaround anytime soon.
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Jiangsu Zhongluman New Material Technology Co., Ltd , https://www.rozhmch.com