[SMM Daily Stainless Steel Review] SS Futures Fluctuated, Rising First and Then Falling Back; Spot Stainless Steel Quotations Edged Lower, and Transactions Recovered

SMM, March 17: SS futures moved in a volatile range. Intraday, SS futures rose first and then pulled back, overall maintaining a sideways pattern, and closed at 14,155 yuan/mt by the midday close. In the spot market, although SS futures were relatively strong in early trading, trader quotes still edged slightly lower than yesterday under the influence of earlier guidance price cuts by major stainless steel mills. However, market sentiment had stabilized somewhat, and against the backdrop of falling prices, both inquiries and transactions increased to a certain extent.

The most-traded SS contract fluctuated in a range. As of 10:15 a.m., SS2605 was quoted at 14,220 yuan/mt, up 175 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the 200-400 yuan/mt range. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi fell by 50 yuan/mt. For cold-rolled trim-edge 304/2B coils, the average price in Wuxi fell by 50 yuan/mt, and the average price in Foshan also fell by 50 yuan/mt. Cold-rolled 316L/2B coils in Wuxi were steady. Hot-rolled 316L/NO.1 coils were quoted steady in Wuxi. Cold-rolled 430/2B coils in both Wuxi and Foshan were also steady.

As the traditional peak consumption season of "Golden March and Silver April" began, the stainless steel market entered a window for demand recovery, with downstream end-users gradually recovering and inquiry and purchasing activity having picked up notably in the near term. However, stainless steel spot prices overall remained basically stable, with no obvious fluctuations. Terminal procurement was still mainly driven by rigid demand, and a full-fledged peak-season boom had yet to emerge, while wait-and-see sentiment still lingered in the market. On the futures side, affected by multiple factors including the continued escalation of geopolitical conflict in Iran, the US restarting the tariff war, and intensified fluctuations in the US dollar exchange rate, uncertainty in macro news increased significantly. This week, SS futures moved sideways within a range, showing mixed performance and no clear direction. On the inventory side, stainless steel social inventory declined this week, supported by recovering downstream demand and cargo pick-up of earlier orders, ending the sharp accumulation trend since February. However, inventory remained at a relatively high level, and destocking pressure had not been fully eased. Although the halt in inventory growth and subsequent pullback released a positive signal and boosted market confidence to some extent, high inventory levels combined with expected supply growth in March still constrained the market. Traders maintained a steady pace of shipments, with no aggressive selling behavior. Supply side, earlier production cuts and maintenance at steel mills had fully ended, and stainless steel production schedules for March were expected to remain high, with pressure from additional supply gradually being released. Affected by the sharp buildup in social inventory in February, stainless steel mills were currently mainly focused on stabilizing prices and making shipments. Recently, major stainless steel mills had consecutively announced unchanged guidance prices, proactively controlling price fluctuations, accelerating inventory turnover, and easing the dual pressure from supply and inventory, but expectations of high supply within the month still posed potential pressure on the market. Cost support continued to strengthen. Recently, mainstream stainless steel mills kept their tender and procurement prices for high-grade NPI relatively low, which to some extent restrained the upward momentum of high-grade NPI. However, nickel ore prices remained at high levels, driving NPI prices to continue edging up slowly. High-carbon ferrochrome prices also strengthened under the dual support of tight spot supply and rising chrome ore prices, further reinforcing cost support for stainless steel. Overall, the core contradiction in the stainless steel market this week was the mismatch between expectations of high supply, the pace of demand recovery, and the progress of inventory destocking. Although the market formally entered the traditional peak consumption season, favorable factors including recovering downstream demand, inventory stopping rising and pulling back, and solid cost support provided support to the market. However, macro news uncertainty remained elevated and the market stayed generally cautious. Coupled with persistently high monthly supply and overall high inventory, stainless steel prices are expected to remain generally stable with slight rise.