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During the week concluding on September 8, 2023, the price trajectory for stainless steel initially witnessed a surge, only to plunge later. By September 8th, the average daily cost for spot 304/2B stainless steel flat plates measuring 1.0 * 1219 * 2438 (with an allowable variance of 0.91) settled at 14,150 RMB/ton. This marked a reduction of 0.4% from its initial weekly rate of 14,207.14 RMB/ton, and it was 6.02% lower than the price from the same time the previous year.

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It was observed that the price patterns for nickel and stainless steel largely mirrored each other, indicating that the price of upstream nickel had a bearing on the cost of downstream stainless steel.

Data from that week indicated a total inventory of stainless steel at 103.3 tons, reflecting a 1.04% decline from the prior week. Both the categories of cold-rolled and hot-rolled stockpiles experienced a modest drop.

On the production front, it was noted that in August 2023, 43 domestic stainless-steel factories had produced 1.7498 million tons of the 300 series crude steel, marking a 3.5% growth from the previous month and a substantial 34.2% surge year-on-year. In September, the output increased to 1.783 million tons, rising by 1.9% month on month and 26.6% from the previous year. However, in contrast, Indonesia's production for August stood at 415,000 tons — a significant month-on-month growth of 48.2%, but a slight dip of 0.2% from the prior year. The subsequent month witnessed a slight drop to 400,000 tons.

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Market insiders had previously anticipated a robust demand in September and October. Yet, the tangible revival in end-user demand remained elusive. Bulk of the procurement was driven by immediate need, further accelerated by futures causing a surge in spot goods. This shift was accompanied by a more cautious purchasing stance amidst a glut of supplies at steel mills.

Furthermore, changes in Indonesia's RKAB reverting to its previous system meant a tightening in the approval process for nickel ore quotas. This, combined with adverse weather conditions in the Philippines, resulted in a hike in nickel ore prices.

Given the rise in stainless-steel production costs, profit margins for steel mills were under pressure. Even then, the production in September remained consistently high. With costs underpinning the rates but challenges in passing on these high prices to end-users, the forecast suggested a possible unstable trend for stainless steel prices in the immediate future.

According to the article by Procurement Resource, the stainless-steel market in September 2023 displayed a volatile price trajectory, influenced heavily by upstream nickel prices and production dynamics. While there was a significant rise in stainless steel production, both domestically and in Indonesia, demand did not meet expectations. Factors such as Indonesia's policy changes and Philippines' adverse weather played roles in driving nickel ore prices. Despite mounting production costs pressuring profit margins, high production persisted. With difficulty in transferring costs to consumers, uncertainty looms over future stainless-steel prices.