[SMM Stainless Steel Daily Review] SS Futures Stopped Falling and Rebounded, Stainless Steel Spot Prices Rose Accordingly

SMM News, March 20: SS futures stopped falling and rebounded. The nonferrous metals futures market generally recovered, with SS futures performing particularly strongly and basically recouping this week’s losses, closing at 14,160 yuan/mt as of the midday close. In the spot market, driven by the strong rebound in SS futures and coupled with stainless steel mill agents holding prices firm, stainless steel retail quotations also moved higher; supported by improving market sentiment, both inquiry activity and trading picked up. High-grade NPI prices remained in the doldrums, and the announced steel mill tender price for high-carbon ferrochrome came in below market expectations, leaving weak cost support for stainless steel.

The most-traded SS futures contract stopped falling and recovered. At 10:15 a.m., SS2605 was quoted at 14,150 yuan/mt, up 220 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 220-420 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi rose by 50 yuan/mt; for cold-rolled trimmed-edge 304/2B coil, the average price in Wuxi rose by 100 yuan/mt, while the average price in Foshan rose by 50 yuan/mt; cold-rolled 316L/2B coil in Wuxi was flat; hot-rolled 316L/NO.1 coil was quoted flat in Wuxi; and cold-rolled 430/2B coil in both Wuxi and Foshan held steady.

As the traditional peak consumption season of “Golden March and Silver April” began, the stainless steel market entered a seasonal recovery window, but end-use demand fell short of expectations. Wait-and-see sentiment among downstream players gradually intensified, and procurement only maintained a pace of restocking for rigid demand, without showing the transaction momentum typical of the peak season. The market’s earlier bullish expectations for stainless steel prices continued to fade. Futures, ongoing escalation in geopolitical conflicts and the lack of any short-term resolution, combined with inflationary pressure that weakened expectations for US Fed interest rate cuts, kept macro-level uncertainty rising. SS futures fluctuated in the doldrums overall this week, with no clear directional trend, making it difficult to provide positive support to the spot market. Inventory side, stainless steel social inventory dropped back slightly this week, driven by downstream cargo pick-up for rigid demand and active shipments by steel mills, but the absolute level remained high. The overall pace of destocking was slow, and elevated inventory continued to noticeably constrain the market. Supply side, stainless steel mills maintained a high production schedule, and pressure from additional supply continued to mount. Coupled with high social inventory, shipment pressure on steel mills increased significantly. To stimulate transactions and accelerate inventory turnover, mainstream stainless steel mills had already proactively lowered finished product guidance prices. Cost side, cost support weakened significantly. Although tighter nickel ore approval supported NPI production costs at relatively high levels, stainless steel mills were currently deeply mired in losses and showed very low acceptance of high-priced raw materials. In addition, steel mills actively pushed for lower prices in purchases, interrupting the rise in NPI prices and causing them to pull back slightly, further weakening cost-side support for higher finished product prices. Overall, the core contradiction in the stainless steel market this week centered on the mismatch among elevated supply, high inventory, and weakly recovering demand. Strong macro uncertainty continued to weigh on futures, while downstream end-users remained cautious and only maintained just-in-time procurement. Steel mills faced shipment pressure and were also constrained by losses in their raw material procurement pace. On balance, stainless steel finished product prices were expected to remain in the doldrums.