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Stainless Espresso: Bullish start for stainless steel after Lunar New Year
Stainless Espresso: Bullish start for stainless steel after Lunar New Year

February 7, 2022 – After the Lunar New Year holidays, the Chinese stainless steel and aluminum market has started the new year on a bullish note. Very good demand, tight availability and an overall optimistic mood are fuelling prices on the Chinese SHFE and the spot market. Nickel prices in Asia are also rising steeply. And prices for base metals and semi-finished products are also up today.

Strong demand: Bullish start for stainless steel after Lunar New Year

The stainless steel market in China has started strongly after the end of the Lunar New Year holiday. Stainless steel futures are up more than 2.8% on average. Spot prices are showing firmness and stainless steel scrap prices are up more than 2% per ton. The market expects strong demand to replenish inventories. Which should give prices a further boost.

Even if the usual news sources want to promise falling prices for stainless steel again (and have rarely been right in the past), the reality in the influential stainless steel market of China looks quite different.

Chinese steel market in bullish mood

Overall, Chinese demand for steel is strong and the mood on the market is bullish. In addition, there are concerns about availability, as production for stainless steel is expected to be at least 10% lower in February 2022. In addition, production cuts for steel in northern China and bad weather central and eastern China are likely to drive prices on the supply side.

Nickel spot prices and futures pick up

Nickel prices on the SHFE picked up sharply today, rising more than 3%. Spot prices also, especially nickel cathodes with 99.9% Ni content are up about 2.5% in spot. NPI prices are also expected to follow suit according to market sources. China is also concerned about raw material availability, which recently not only pushed LME inventories to a new historic low, but also caused nickel to rally to over $23,500 per ton in London last week.

Base Metals pick up in Asia

Stocks of interest on the SHFE and DCE rallied nicely on the first trading day after Chinese New Year. Aluminum rose another 3% on supply concerns. In addition, a significant increase in demand for aluminum and rising prices for alumina are expected, which should significantly fuel aluminum values. Iron ore (DCE: +2.45%), steel (SHFE +2%) and stainless steel (+2.8%) values also rose strongly.

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