Macro uncertainties are difficult to dissipate, the market remains cautious and watchful as SS futures weaken. 【SMM Analysis】

This week, the most-traded SS contract was in the doldrums. As of 10:30 AM on April 25, the SS2506 contract was quoted at 12,670 yuan/mt, down 115 yuan/mt WoW.

From a macro perspective, US President Trump threatened to fire Fed Chairman Powell this week, triggering market panic, a sharp decline in US stocks, and a sell-off in US bonds, leading to a pullback in SS futures prices. However, Trump later clarified that he had no intention of firing Powell, which somewhat eased market tension. Meanwhile, Trump proposed a significant reduction in tariffs on China, signaling a de-escalation in the tariff war. US Treasury Secretary Besant also explicitly stated that "the trade war with China is unsustainable" and revealed that substantive tariff talks between China and the US are underway, with a potential short-term agreement. Multiple positive factors boosted SS futures prices, halting the decline and stabilizing them.

On the fundamental side, despite the approaching Labour Day holiday, pre-holiday stockpiling demand was very sluggish, with transactions mainly concentrated in low-priced warrants, and downstream purchases remained cautious. Although social inventory of stainless steel significantly decreased this week, downstream purchasing enthusiasm remained low, increasing the distribution pressure on steel mills. Under sales pressure, Tsingshan Group lowered the prices of 201 and 304 stainless steel cold and hot rolled coils by 200 yuan/mt on Friday, further driving market prices down.

Overall, due to the unmet pre-holiday stockpiling expectations, continued weak demand for stainless steel, and the disturbance of uncertain macro factors, market sentiment remains cautious. In the short term, stainless steel futures prices are expected to maintain a fluctuating trend.