Futures Weakness Drags Down Stainless Steel Scrap, Off-Season Demand Weakness Suppresses Market [SMM Stainless Steel Scrap Weekly Review]

Published: Jul 3, 2026 15:51

Save

[SMM Stainless Steel Scrap Market Weekly Review] Futures Weakness Dragged Down Stainless Steel Scrap Prices; Off-Season Demand Slump Pressured Market This week, prices of 304 stainless steel scrap off-cuts in east China pulled back, with a quotation range of 10,350-10,450 yuan/mt; prices of the same specification stainless steel scrap in the Foshan area fell in tandem, with a price range of 10,200-10,500 yuan/mt. From the perspective of raw material production cost analysis, the current cost to produce stainless steel entirely using stainless steel scrap is about 14,520.18 yuan/mt, while the cost using high-grade NPI reaches 14,988.98 yuan/mt, with the two maintaining a favorable cost spread. Stainless steel scrap prices pulled back slightly this week. During the week, SS futures consolidated weakly, and the weak sentiment in the futures market transmitted to the spot market, driving stainless steel finished product spot prices to also pull back slightly; the decline in the substitute raw material high-grade NPI slowed down, reducing its drag on the market, but the overall atmosphere in the raw material market remained mediocre. Under the influence of the futures-spot linkage, stainless steel scrap prices edged down slightly in tandem. Overall, cost support is difficult to offset the bearish pressure from fundamentals. The market has now entered the traditional consumption off-season for stainless steel, with end-use demand lacking internal momentum, and the expected production schedules of stainless steel mills pulling back, directly leading to a simultaneous weakening of rigid demand for stainless steel scrap. Meanwhile, news about the supplementary quota for Indonesian nickel ore remains unresolved, and policy uncertainty in the industry chain has been rising, leaving the overall market sentiment cautious and wait-and-see. Although stainless steel scrap still maintains a decent economic advantage over high-grade NPI, providing bottom support for prices, under the dual pressures of weak futures and the off-season…

This week, prices of 304 stainless steel scrap off-cuts in east China fell back, with a quotation range of 10,350-10,450 yuan/mt; prices for the same specification scrap in Foshan dropped in tandem, within a range of 10,200-10,500 yuan/mt. An analysis of raw material production costs shows that the current cost of producing stainless steel entirely using scrap is approximately 14,520.18 yuan/mt, while the cost using solely high-grade NPI reaches 14,988.98 yuan/mt, still maintaining a significant cost spread.

Stainless steel scrap prices pulled back slightly this week. During the week, SS futures remained in the doldrums and consolidated, with weak sentiment spilling over to the spot market and driving spot prices of stainless steel finished products to pull back slightly in tandem. Meanwhile, the decline of alternative raw material high-grade NPI slowed, reducing its drag on the market, but overall raw material sentiment remained mediocre. Affected by the correlation between futures and spot markets, stainless steel scrap prices edged down in tandem.

Overall, cost support is hard to offset the bearish pressures from fundamentals. The market has now entered the traditional consumption off-season for stainless steel, with end-use demand lacking intrinsic momentum and steel mills' expected production schedules pulling back, directly leading to weakening rigid demand for stainless steel scrap. Meanwhile, the unresolved issue of Indonesia's additional nickel ore quotas has heightened policy uncertainties in the industry chain, and the overall market sentiment leans cautious and wait-and-see. Although stainless steel scrap still maintains a good economic advantage over high-grade NPI, providing bottom support for prices, under the combined impact of weak futures, off-season demand pullback, and uncertain policy expectations, market trading sentiment remains cautious, making it difficult to reverse the weak market structure. In the short term, stainless steel scrap prices may continue to be in the doldrums.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

Common.Time.minsAgo

[SMM Stainless Steel Daily Review] SHFE Nickel Stops Falling but Fails to Reverse SS Weakness; Guidance Price Cut Drives Stainless Steel Spot Prices Downward

[SMM Stainless Steel Daily Review] SHFE Nickel Stops Falling but Fails to Change SS Weakness, Guidance Price Cut Drags Down Stainless Steel Spot Prices According to SMM on July 9, SS futures further pulled back and declined. Although SHFE nickel strengthened and rose, SS remained under pressure from capital flows and continued to decline. As of the close, the most-traded SS contract settled at 14,355 yuan/mt. In the spot market, driven by the consecutive decline in SS futures, a mainstream stainless steel mill cut its guidance price, leading spot quotes to follow suit and decline. Against a backdrop of persistently weak overall market sentiment, transactions remained sluggish. SS Futures Most-Traded Contract: At 10:15 AM, SS2608 was at 14,375 yuan/mt, down 115 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi ranged from 545 to 1,095 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi remained stable; for cold-rolled raw edge 304/2B coils, the average price in Wuxi fell by 50 yuan/mt, and the average price in Foshan fell by 50 yuan/mt; the price of cold-rolled 316L/2B coils in Wuxi remained flat; for hot-rolled 316L/NO.1 coils, quotes in Wuxi were flat; cold-rolled 430/2B coils in both Wuxi and Foshan remained unchanged. This week, the tug-of-war between macro and industrial logic dominated the market trend. US inflation data pulled back, expectations for US Fed interest rate hikes further cooled, and the US dollar index weakened, collectively lifting the valuations of commodities and nonferrous metals and providing macro support for the metal sector. However, industrial sentiment remained persistently bearish. The issue of Indonesia's nickel ore supplementary quotas remained unresolved, and the market held strong expectations for ample nickel supply in the future...

Common.Time.minsAgo

Jul 8, 2026 15:21

[SMM Stainless Steel Daily Review] SS futures resumed a downward trend, spot stainless steel prices were weak and trading was sluggish.

[SMM Stainless Steel Daily Review] SS Futures Return to Downtrend, Spot Stainless Steel Prices Weak with Sluggish Transactions According to SMM on July 8, SS futures overall fell and pulled back. Affected by capital operations, SS futures ended the previous rally and returned to a weakening trend. At the close, the most-traded SS contract settled at 14,450 yuan/mt. In the spot market, dragged by the pullback in SS futures, spot stainless steel quotes fell in tandem. The "rush to buy amid continuous price rise and hold back amid price downturn" mentality, combined with the ongoing consumption off-season, made it hard to reverse the sluggish trading pattern. For the most-traded SS futures contract, at 10:15 AM, SS2608 was quoted at 14,490 yuan/mt, down 300 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the 530-980 yuan/mt range. In the spot market, the average price of Wuxi cold-rolled 201/2B coil rose 50 yuan/mt; for cold-rolled mill-edge 304/2B coil, the average price in Wuxi fell 25 yuan/mt, while in Foshan it rose 50 yuan/mt; the price of cold-rolled 316L/2B coil in Wuxi remained flat; hot-rolled 316L/NO.1 coil in Wuxi was quoted unchanged; cold-rolled 430/2B coil prices in both Wuxi and Foshan stayed flat. This week, the game between macro and industry logic dominated the futures trend. US inflation data pulled back, expectations for US Fed interest rate hikes cooled further, and the US dollar index weakened, which overall boosted valuations of commodities and nonferrous metals and provided macro support for the metals sector. However, sentiment on the industry side remained bearish. The issue of Indonesia's nickel ore supplementary quota remained unresolved, and the market had strong concerns about an easing supply of nickel resources going forward, ...

Jul 8, 2026 15:21

Jul 7, 2026 15:14

[SMM Stainless Steel Daily Review] Funds Drive Up SS Futures, Strengthening the Market; Stainless Steel Spot Market Trading Sluggish

[SMM Stainless Steel Daily Review] Funds Drive SS Futures Higher, Spot Market Trade Sluggish According to SMM news on July 7, SS futures maintained a pattern of consolidating on a strong note overall. Fundamentals did not change significantly. Driven by fund-side operations, SS extended its strengthening trend from the previous trading day. As of the close, the most-traded SS contract settled at 14,775 yuan/mt. In the spot market, although SS futures continued to run strong, spot fundamentals did not improve noticeably: while spot offers were raised following the rally, after low-priced cargoes saw concentrated deals yesterday, market trading weakened again today, with confidence in the outlook remaining insufficient. The most-traded SS futures contract. At 10:15 am, SS2608 was at 14,790 yuan/mt, up 65 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 280-680 yuan/mt. In the spot market, the average price for Wuxi cold-rolled 201/2B coil was flat; for cold-rolled slit-edge 304/2B coil, the average price in Wuxi rose 50 yuan/mt, and in Foshan it rose 50 yuan/mt; Wuxi cold-rolled 316L/2B coil price was flat; for hot-rolled 316L/NO.1 coil, Wuxi offers were flat; cold-rolled 430/2B coil in both Wuxi and Foshan was flat. This week, the tug-of-war between macro and industry logic dominated futures moves. US inflation data pulled back, expectations for US Fed interest rate hikes cooled further, and the US dollar index weakened, overall boosting commodity and nonferrous metals valuations and providing macro support for the metals sector. However, sentiment on the industry side remained persistently bearish, …

Jul 7, 2026 15:14