[SMM Analysis] Easing Geopolitical Risks Boost Market Sentiment, Stainless Steel Inventory Slightly Declines but Remains Under Pressure

SMM April 9 reported that this week, the total stainless steel inventory across the Wuxi and Foshan markets saw slight destocking, declining from 984,100 mt on April 2, 2026 to 978,700 mt on April 9, 2026, down 0.55% WoW.

Stainless steel social inventory showed a slight destocking trend this week. The week entered April, coinciding with the Qingming Festival, but the holiday was relatively short, and the market did not see significant stockpiling demand. Downstream end-user procurement remained driven by rigid demand throughout, with no concentrated restocking wave forming. Futures side, the US-Iran conflict de-escalated during the week, with news of a two-week ceasefire between the two sides, easing market sentiment. Futures were lifted accordingly and probed higher, which in turn boosted spot market confidence. Spot inquiries and transactions recovered somewhat, directly driving a slight inventory reduction. However, it should be noted that geopolitical conflict risks had not been fully eliminated, short-term disruptions persisted, and the cautious sentiment among downstream end-users had not entirely dissipated, with a consistent lack of willingness to proactively stockpile. Supply side, steel mills concentrated their distribution to the market at the end of March, resulting in elevated arrivals in the earlier period, while this week's market arrivals decreased WoW, alleviating inventory accumulation pressure to some extent. However, stainless steel mill production schedules remained at high levels in April, and supply-side pressure continued to persist, posing significant challenges to further destocking. Coupled with the potential uncertainties of geopolitical conflicts at the macro perspective, the overall cautious atmosphere in the market had not fully faded, further constraining the pace of destocking. Overall, this week's slight destocking was primarily driven by the combined effects of the US-Iran ceasefire lifting futures, improved spot transactions, and reduced arrivals this week. Currently, steel mills' high production schedule pace had not changed significantly, and social inventory still faced considerable destocking pressure against the backdrop of high supply. Although spot transactions recovered somewhat, the cautious sentiment among downstream players was difficult to change, making significant destocking unlikely in the short term. Going forward, the trajectory of inventory will still hinge on the evolution of geopolitical conflicts, the direction of futures, and the intensity of actual downstream demand release.