[SMM Stainless Steel Daily Review] Stainless steel futures prices hold up well, and restocking of spot stainless steel at low prices increases.

According to SMM on June 30, SS futures held up well. Despite a weak night session, they drifted higher after the daytime session opened and, by close, the most-traded SS contract settled at 14,540 yuan/mt. In the spot market, morning offers were marked down due to the weak night session, but as SS futures strengthened through the daytime session, market activity recovered and demand for low-price replenishment increased.

SS Most-Traded Futures Contract. At 10:15 am, SS2608 traded at 14,540 yuan/mt, down 175 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the 480–980 yuan/mt range. In the spot market, the average price of Wuxi cold-rolled 201/2B coil was flat; cold-rolled raw edge 304/2B coil average prices in Wuxi and Foshan were both flat; cold-rolled 316L/2B coil prices in Wuxi were flat; hot-rolled 316L/NO.1 coil quotes in Wuxi were flat; and cold-rolled 430/2B coil prices in both Wuxi and Foshan were flat.

This week, stainless steel futures and spot were in the doldrums. Ex-China macro headwinds, combined with industry sentiment disruptions, stoked market pessimism and fully exposed off-season fundamentals. The overall pattern featured macro pressure on futures, weakening off-season demand, traders cutting prices to reduce inventory, supply contraction supporting inventories, and shrinking steel mill profits. Futures weakened under the drag of monetary policy and raw material rumors, while spot held resilient thanks to steel mills holding prices firm—but end-user transactions were sluggish, keeping the market broadly bearish. On the futures side, macro headwinds dominated this week’s trading. Easing US-Iran tensions offered a small boost to risk appetite, but the Fed’s hawkish stance pushed up rate hike expectations, suppressing overall valuations across the non-ferrous complex. Mid-week, rumors of expanded nickel ore quotas in Indonesia surfaced; although later officially denied, market pessimism had already spread, risk-averse funds fled, and SS futures continued to drift lower. In terms of spot and inventory, a clear futures-spot divergence emerged this week, with spot resilience stronger than futures. Mainstream steel mills showed a firm willingness to hold prices, effectively defending the price floor. However, as the market entered the traditional consumption off-season, end-user rigid demand kept weakening. Falling futures further undermined confidence, end-user wait-and-see sentiment grew thick, and on-site trading was sluggish. Traders aggressively sought to reduce inventory, and low-price goods appeared frequently. At the same time, maintenance-driven production cuts materialized, producing a marginal supply contraction that cushioned off-season demand pressure. Overall social inventory stayed stable this week without notable fluctuations. On the cost and profit side, finished product and raw material trends diverged, and steel mill profits continued to narrow. Stainless steel spot prices fell along with futures, lowering the price center. Yet the logic of high-grade NPI tightness was expected to persist, so prices resisted declines and saw only limited losses; raw material costs remained rigid. Falling finished product prices, together with firm costs, directly squeezed smelting profits, intensifying the industry’s overall profitability pressure. On the whole, this week’s market was dominated by macro headwinds, with weak off-season rigid demand serving as the core fundamental constraint. Steel mills holding prices firm and supply contraction are underpinning spot prices and inventories, but it is difficult to reverse the weak market trend. The cost rigidity of high-grade NPI continues to pressure steel mill profits. In the short term, the futures market remains disturbed by US Fed policy and news on Indonesian nickel, and the weak supply-demand pattern during the off-season is hard to change. Going forward, key areas to monitor include interest rate hike expectations, SS futures fluctuations, downstream rigid demand, steel mill maintenance progress, and nickel raw material price trends.