Domestic EMM Prices still Have Room to Fall Slightly

Today, mainstream offers of EMM were in the RMB 14,900-15,000/mt range. Deals can be made in a small amount at RMB 14,800/mt yesterday. Traders replenished stock in a small amount and downstream consumers' buying interest was still not high.

It was reported that sales at stainless steel mills declined day by day and purchasing volumes from downstream purchasers have already limited. Wait-and-see sentiment from stainless steel mills expanded and purchasing volumes were few at present, since EMM prices constantly declined. Traders only make purchase in a small amount since domestic EMM prices were on downward track and didn't stabilize yet at present, and most traders still planned to replenish stocks when prices fall further.

It was also reported that operating rates at domestic EMM prices were around 70%, and supply of goods were relatively ample in the market. Some producers had to move goods by virtue of poor cash flow at the year end, and there were low-priced goods supplied in the market. However, EMM producers without cash flow pressure adopted a wait-and-see attitude and move limited goods at present.

SMM believed that demand from downstream consumers gradually weakens and supply of goods is relatively ample in the market, so domestic EMM prices will still have room to decline slightly.

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