In January, China stainless steel market was in the traditional off season. In addition, fund was in a tight state and downstream purchasing was cautious due to Spring Festival Holiday.

Under such circumstances, domestic stainless steel prices followed the steady trend of December, 2013. However, in mid January, LME nickel price soared up, which boosted prices of 304 series stainless steel. Market transactions were various in different markets.

Take demand, fund, inventory, LME nickel price trend and steel mills' price adjustments into consideration, Mr Xing Zhongying chairman of Tianjin stainless steel industry association pointed out that China stainless steel price will be stable in Q1 2014 but couldn't roll out the possibility of moving up. Here are major reasons for the judgment above:

1. LME nickel price mainly fluctuated. During H1 of January, LME nickel price continued the downward trend of the end in 2013 and glided down to USD 13,413 per tonne but then hit the peak point of USD 14,796 per tonne on January 22 up USD 829 per tonne over the end of December, 2013. Low priced nickel was rare in international market as Indonesia officially implemented the ore ban policy. What's more, America and Europe economy kept strong momentum of recovery. LME nickel price is forecasted to hover between USD 14,400 per tonne to USD 15,000 USD per tonne. China's electrolytic nickel also followed the V price trend of LME nickel. Jinchun Group adjusted its electrolytic nickel frequently. As of January 28, Jinchuan Group slashed electrolytic nickel by 500 yuan per tonne to CNY 96,000 per tonne.

2. Steel mills lifted up ex works prices slightly. Mainstream steel mills mainly rolled over their ex works prices. Among that, Baosteel Stainless Steel maintained its ex works prices of 304 CR coils per plate, 430 HR coils and plate and BN series unchanged over January. TISCO also held its ex works prices of 304 series stainless steel steadily and only lifted up that of 430 series by CNY 200 per tonne to CNY 10,700 per tonne. Southwest Stainless Steel lifted up its February 304 series HR white cover coil (2.7 mm to 5.0 mm) ex works price by CNY 200 per tonne to CNY 14,500 per tonne.

3. High carbon ferrochrome purchasing prices stood steadily. February high carbon ferrochrome purchasing prices of mainstream steel mills were unchanged compared with January.

4. The inventory declined down month on month. By January 15, stainless steel inventory of Wuxi market is proved to be 150700 tonnes down 1300 tonnes month on month and that of Foshan market also decreased by 17000 tonnes to 115900 tonnes.

Stainless steel demand holds up well in medium and long term. Besides, LME nickel price may also grow up. Although stainless steel demand and end user demand hasn't recovered completely after Spring Festival, China stainless steel price is expected to warm up and be stable by the end of March.