SMM February 13, SS futures continued to decline. On the last trading day before the Chinese New Year holiday, nonferrous metals futures were under pressure and fell collectively, with SS futures also weakening in sync, eventually closing at 13,860 yuan/mt. In the spot market, despite the volatility in SS futures and rising high-grade NPI prices before the holiday, most spot traders had already entered the holiday period, logistics and transportation were suspended, transactions were scarce, and prices remained stable, with the market awaiting post-holiday resumption of work.
The most-traded SS futures contract fell back. At 10:30 a.m., SS2604 was quoted at 13,765 yuan/mt, down 315 yuan/mt from the previous trading day. In Wuxi, the spot premium/discount for 304/2B was in the range of 405-605 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was 8,500 yuan/mt; for cold-rolled mill edge 304/2B coil, the average price in Wuxi was 14,100 yuan/mt, and in Foshan, 14,050 yuan/mt; for cold-rolled 316L/2B coil in Wuxi, 26,600 yuan/mt, and in Foshan, 26,600 yuan/mt; for hot-rolled 316L/NO.1 coil in Wuxi, 25,750 yuan/mt; for cold-rolled 430/2B coil in both Wuxi and Foshan, 7,800 yuan/mt.
In the futures market, driven by a weakening macro influence and narrowing fluctuations in nonferrous metals futures, the overall trend at the beginning of the week was relatively stable with subdued trading activity. As the Chinese New Year holiday approached, market participants adopted a wait-and-see attitude due to risk aversion during the holiday, coupled with the fact that previous bullish factors had largely been realized. Mid-week, stimulated by news of Indonesia's nickel mine approval, SHFE nickel futures strengthened, which transmitted to stainless steel futures, leading to a synchronous rise in SS futures. Overall, this week's market movements were primarily driven by futures and news, with the impact of spot market fundamentals relatively limited. In the spot market, most downstream end-users had entered the Chinese New Year shutdown, and traders also gradually left for the holiday, resulting in sluggish market activity and overall sluggish transactions. Only a small number of post-holiday orders were concluded, with traders mainly focusing on inventory management and arranging post-holiday orders, while both active shipments and restocking willingness remained low, and spot prices were basically stable. Inventory showed typical seasonal buildup characteristics around the Chinese New Year holiday, mainly due to sluggish pre-holiday transactions and slowed material circulation, with some warehouses only receiving but not shipping out. However, as inventory levels were relatively low beforehand, although there was a significant buildup during the week, overall inventory remained within a reasonable range. Currently, the market holds positive expectations for the post-holiday "Golden March, Silver April" peak consumption season, and traders maintain a good mindset, keeping stainless steel spot prices stable. On the supply side, overall operations were stable, with some steel mills arranging minor production cuts in advance for the Chinese New Year holiday, but downstream demand simultaneously entered a holiday stagnation, resulting in a weak supply-demand balance in the market, which had a relatively limited impact on stainless steel prices. Cost side, high-grade NPI prices strengthened again, driven by news about Indonesian nickel ore; high-carbon ferrochrome and stainless steel scrap prices remained stable. As a result, stainless steel production costs increased slightly, but spot stainless steel transactions paused, with prices holding steady, and steel mill profit margins narrowed significantly. Overall, this week, the stainless steel market was dominated by futures and news. Pre-holiday trading was sluggish, and market activity remained low. However, the approval of Indonesian nickel ore policies provided short-term support to market sentiment. Combined with cost support, reasonable inventory, and positive post-holiday demand expectations, the market did not experience wild swings. In the near term, market activity is likely to remain low, with close attention needed on the impact of Indonesian nickel ore policies, price changes in key raw materials, and the pace of post-holiday downstream demand recovery.
![Iron ore prices fell before the Chinese New Year, but data indicate an improvement in the supply surplus [SMM Brief Review].](https://imgqn.smm.cn/usercenter/hyiDc20251217171715.jpg)
![[SMM Analysis] Total HRC Inventory Expected to Accumulate Around 21% in the First Week After Chinese New Year](https://imgqn.smm.cn/usercenter/ikbxI20251217171718.jpg)
