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March Stainless Steel Market: Cost-Push Pressure vs. High Scheduling, Multiple External Risks Intensify Uncertainty

2026-03-11

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I. Core Contradiction: Misalignment Between Rising Raw Material Costs and High Production Scheduling

The primary contradiction in the stainless steel market in March lies in the mismatch between tightened upstream raw material supply and high scheduling at midstream steel mills, leading to sustained production pressure and widened profit differentiation across the industry.

Raw Material Side: Tightened Nickel Ore Supply + Reduced and Converted Nickel Pig Iron Production; Overcapacity in Nickel Pig Iron May Be Eliminated
In terms of nickel ore, a supply contraction has been firmly established. Indonesia, the world’s largest nickel ore exporter, continues to tighten control policies. In 2026, its nickel ore mining quota will be reduced from 379 million tons in 2025 to 260–270 million tons, a drop of over 30%. Coupled with the Ramadan season and rainy season, nickel ore shipments from Indonesia are disrupted. Domestic nickel ore import approvals are tight with extended cycles, forcing some traders to scale back imports. This has resulted in tight domestic spot nickel ore supply and continuously strong ore prices, further increasing raw material procurement pressure for steel mills.
In addition, the Philippines has entered its rainy season with declining nickel ore grade, exacerbating raw material inventory shortages for domestic nickel pig iron producers.

For nickel pig iron, insufficient profits have driven enterprises to convert to matte nickel production. Meanwhile, the situation in the Middle East has caused a shortage of sulfuric acid, constraining MHP output and accelerating the conversion from nickel pig iron. Combined with the surge in demand driven by high crude steel scheduling in March, the oversupply of nickel pig iron is likely to be eliminated in March.

Steel Mill Side: High Crude Steel Scheduling in March Puts Mills Under Pressure

In sharp contrast to tightened raw material supply, domestic stainless steel crude steel scheduling plans have risen sharply in March 2026. Total domestic stainless steel crude steel output is expected to reach 353,640 tons, a month-on-month increase of 36.5% and a year-on-year increase of 1.8%. This continues the capacity expansion trend after the Spring Festival holiday, reflecting mills’ expectations of post-holiday demand recovery and efforts to make up for capacity gaps during the holiday.

However, the mismatch between high crude steel output and tight raw materials has pushed up procurement costs. Based on the latest nickel pig iron purchase price from Tsingshan, the cost of 304 cold-rolled stainless steel has risen above 14,000 RMB/ton on a 毛基 basis.

Meanwhile, ongoing tensions in the Middle East have sharply raised freight rates for chrome raw materials, along with potential risk surcharges, further increasing chrome procurement costs. Rising energy and alloy prices have also directly lifted smelting expenses. Under these combined factors, production pressure on steel mills has intensified further.

II. Macro Linkage: Multiple Variables Worsen Market Uncertainty

The core contradiction in the stainless steel market is not isolated, but deeply linked to external factors including recent macroeconomic trends, international trade policies and geopolitical conflicts. These macro factors affect the pace of downstream demand recovery, amplify raw material supply disruptions, and increase market uncertainty.

Domestically, the weak economic recovery remains unchanged, constraining downstream stainless steel demand. Although the national policies of large-scale equipment renewal and consumer goods replacement have been fully implemented, boosting demand expectations for high-quality special steel and stainless steel, and some enterprises have achieved a strong start to the year, policy effects are lagging and cannot fully reverse weak downstream demand in the short term. The actual pulling effect of recent policies on stainless steel demand still needs observation.

On international trade policies, China’s stainless steel exports now require licenses for all tax codes, raising compliance costs for exporters. Since February 24, the United States has imposed a 15% additional tariff on most imported goods including stainless steel and downstream products, reshaping global stainless steel trade flows. The EU has tightened trade defenses, and the Carbon Border Adjustment Mechanism (CBAM) has entered substantive implementation, imposing stricter requirements on carbon footprint management and further raising export costs.

In addition, the escalating conflict between the US and Iran has disrupted shipping through the Strait of Hormuz, pushing up global energy and shipping costs and adding further pressure to stainless steel exports and production costs.

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