[SMM Stainless Steel Daily Review] SS Futures Strengthened and Rose, Spot Stainless Steel Operated Steadily

SMM April 10 reported that SS futures strengthened and rose. SS futures extended the mid-week rally and further explored upward, closing at 14,495 yuan/mt as of the midday session. Spot market side, despite SS futures exploring higher, the spot market remained stable. In addition, a major stainless steel producer released its guidance price today, which stayed flat MoM. Although intraday inquiry activity picked up somewhat and some low-priced cargoes decreased, actual transactions remained limited, and upward momentum for prices was insufficient.

The most-traded SS futures contract strengthened and rose. At 10:15 AM, SS2605 was quoted at 14,470 yuan/mt, up 180 yuan/mt from the previous trading day. Spot premiums for 304/2B in the Wuxi area ranged from 50-250 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi held steady; for cold-rolled trimmed-edge 304/2B coils, the Wuxi average price rose by 50 yuan/mt while the Foshan average price held steady; cold-rolled 316L/2B coils in the Wuxi area held steady; hot-rolled 316L/NO.1 coils were quoted flat in Wuxi; cold-rolled 430/2B coils in both Wuxi and Foshan held steady.

The stainless steel market is currently in the traditional peak season of "Golden March and Silver April." In the short term, macro tailwinds drove confidence recovery, and spot inquiry activity picked up. However, cautious sentiment among downstream end-users persisted, with purchases remaining driven by rigid demand. Acceptance of high-priced cargoes was poor, and transactions relied on low-priced resources, with no significant volume increase overall. Futures side, US-Iran tensions eased this week as both sides reached a two-week ceasefire agreement and initiated negotiations, with macro tailwinds boosting SS futures and market sentiment somewhat relieved. However, geopolitical risks were not fully eliminated, and coupled with intensifying US inflation and discussions of rate hikes from the US Fed, market fluctuation risks increased, making it difficult for futures to sustain their rise, with limited impact on spot prices. Supply and inventory side, steel mill production schedules for April stayed high, and supply pressure remained unrelieved. Thanks to confidence recovery, active inquiries, and the end of concentrated month-end cargo distribution, social inventory pulled back slightly this week to 978,700 mt, down 0.55% WoW. However, under the backdrop of high supply, inventory destocking remained under pressure, and steel mill shipments faced challenges. Cost side, high-grade NPI had price support due to losses, but steel mills faced significant cost pressure with low purchase willingness, keeping high-grade NPI prices subdued. Stainless steel scrap and high-carbon ferrochrome prices held steady, and stainless steel mills overall remained on the edge of breakeven, with the tug-of-war between upstream and downstream continuing. Overall, the core market contradiction this week lay in the interplay of macro uncertainties, high supply, and cautious demand. Although the peak season provided some support and the cost side formed a floor, it was difficult to drive prices upward. Coupled with ongoing macro disturbances and persistent downstream wait-and-see attitudes, the market was expected to maintain a relatively stable trajectory in the short term. Going forward, attention should be paid to the progress of US-Iran negotiations, US Fed policy direction, and the actual release of downstream demand.