[SMM Analysis] Spot Cargo Enters Market Closure, Raw Material Rebound Strengthens Bottom Support [SMM Stainless Steel Futures Weekly Review]

SMM data showed that during the week (February 9-13, 2026), the final trading week before the Chinese New Year holiday, the stainless steel market essentially entered a "market closure" mode, with price movements primarily driven by capital flows in the futures market. The most-traded contract officially switched to SS2604, and as of 10:30 on February 13, the contract was quoted at 13,765 yuan/mt. Affected by pre-holiday capital outflows, trading in the futures market was sluggish, and the price center fluctuated rangebound within the range of 13,700-13,800 yuan/mt. Despite the lack of immediate guidance from the spot market, an unexpected rebound in raw material prices provided strong support at the bottom for the futures market, limiting the downside room during the vacuum period.

From a macro perspective, policy signals from China and the US set the tone for the post-holiday macroeconomic backdrop. Domestically, the central bank released its monetary policy report, clearly stating the continuation of moderately accommodative policies and maintaining ample liquidity to provide support for the post-holiday economic recovery. Overseas, US non-farm payrolls increased by 130,000 in January, and the unemployment rate fell to 4.3%. The strong economic data significantly reduced the probability of a near-term interest rate cut by the US Fed (the probability of a March rate cut was less than 20%). The expectation that "tight monetary conditions will persist longer" exerted some downward pressure on commodity valuations. However, during the extended Chinese New Year holiday, the market focused more on the cumulative effects of domestic policies and the resilience of post-holiday demand recovery.

From a fundamental perspective, the spot market had fully entered the holiday mode, with inventories showing a seasonal buildup. The latest SMM data showed that social inventory rose to 894,500 mt this week, an increase of 25,900 mt compared to 868,600 mt last week. This inventory buildup aligns with the seasonal pattern around the Chinese New Year, primarily due to downstream end-user shutdowns and the stagnation of goods circulation. Regarding spot transactions, the vast majority of traders had already left for the holiday, with only a small number of post-holiday orders being locked in, leaving the market in a frozen state characterized by "existing prices but no market." Although inventories increased noticeably, considering the previously low inventory base, the total volume remains within a reasonable range. Furthermore, the market generally holds an optimistic outlook for the post-holiday "Golden March, Silver April" peak season. Suppliers maintained a steady mindset, with no signs of panic selling pressure emerging.

The "counter-trend rebound" on the cost side was the highlight of the week. Against the backdrop of stalled finished product trading, raw materials showed unexpected resilience. As of February 13, the price of high-grade NPI rebounded to 1,051.5 yuan/mtu, up 11.5 yuan WoW, recouping some of the previous losses; high-carbon ferrochrome held steady at 8,550 yuan/mt (50% metal content). The recovery in raw material prices was supported, on one hand, by continued expectations regarding Indonesian ore policy and, on the other hand, reflected upstream optimism about post-holiday demand. The upward shift in the cost center directly raised the break-even point for steel mills, building a more solid cost floor for stainless steel prices upon their return after the holiday.

Overall assessment: This week's market exhibited a typical "pre-holiday closing" pattern, with capital outflows leading to reduced volatility and a spot market shutdown causing distortions in the spot-futures price spread. Although the 894,500 mt inventory confirmed an inventory buildup trend, the rebound in NPI indicates that the industrial fundamentals have not deteriorated. Looking ahead to the post-holiday market, the core focus of market dynamics is expected to quickly shift from "capital risk aversion" back to "supply-demand verification." As the peak season of "Golden March, Silver April" approaches, the market holds strong expectations for a demand recovery. If the post-holiday inventory buildup remains within a controllable range, coupled with raw material cost support above 1,050 yuan per mtu, stainless steel is poised to get off to a good start or experience a stabilization and rebound.