The Peak Season for End-Use Demand Has Yet to Arrive, Stainless Steel Prices Struggle to Rise [SMM Stainless Steel Daily Report]

SMM August 29: SS futures first declined then rose, with an overall pullback. Before noon, SS futures fluctuated downward, breaking below 12,800 yuan/mt, then edged up slightly in the afternoon, closing above 12,800 yuan/mt. Spot market-wise, SS futures lacked upward momentum, but with the approaching September-October peak season, market sentiment remained basically stable. No significant price adjustments were observed intraday, with overall quotations holding steady from yesterday afternoon. Transactions were mainly just-in-time procurement, while downstream wait-and-see sentiment remained heavy. Social inventory further declined this week, down 0.49% WoW, dropping to 928,800 mt.

Futures-wise, the most-traded 2510 contract fluctuated. At 10:30 am, SS2510 was quoted at 12,790 yuan/mt, down 10 yuan/mt from the previous trading day. In Wuxi, 304/2B spot premiums/discounts ranged between 380-580 yuan/mt. In the spot market, Wuxi's 201/2B cold-rolled coil averaged 8,050 yuan/mt; 304/2B cold-rolled mill-edge coil averaged 13,100 yuan/mt in both Wuxi and Foshan; 316L/2B cold-rolled coil was quoted at 25,675 yuan/mt in both regions; 316L/NO.1 hot-rolled coil averaged 25,100 yuan/mt in both locations; 430/2B cold-rolled coil was quoted at 7,450 yuan/mt in Wuxi and Foshan.

This week, after an initial macro tailwind-driven rise, SS futures fluctuated within the 12,800-12,900 yuan/mt range.Although further upward momentum appeared limited, the overall pullback trend showed improvement. Market confidence gained some support, despite continued weak spot market acceptance of high-priced material. However, active trader discounts slightly improved overall inquiries and transactions. Stainless steel social inventory has declined for eight consecutive weeks, reaching early-year levels, easing steel mills' sales pressure. Additionally, recent rises in nickel, chromium, and molybdenum raw material prices further pushed up stainless steel cost centers. Meanwhile, heightened expectations for US Fed interest rate cuts and national "anti-rat race" policies fostered general market optimism. However, current end-user demand remains incomplete, with September stainless steel production expected to increase further. Coupled with ongoing futures volatility, market fluctuations may persist. Therefore, close monitoring of macro policy implementation and actual demand recovery remains crucial.