Futures Price Strength Fails to Fully Transmit Positive Impact, Stainless Steel Scrap Market Remains Stable [SMM Stainless Steel Scrap Market Weekly Review]

This week, 304 stainless steel scrap off-cuts prices in east China remained stable at 10,100-10,200 yuan/mt; prices for the same grade of stainless steel scrap off-cuts in Foshan pulled back slightly, with a price range of 9,700-10,000 yuan/mt. From the raw material production cost perspective, the current cost of producing stainless steel entirely from stainless steel scrap was approximately 14,218.64 yuan/mt, while the production cost using entirely high-grade NPI was 14,706.33 yuan/mt.

This week, stainless steel scrap prices were largely stable, with no clear one-directional trend. Although the US-Iran conflict eased this week with both sides reaching a two-week ceasefire agreement, the positive news drove SS futures higher, but the spot stainless steel finished product market saw limited impact, with only a slight increase that failed to form effective transmission and did not notably boost stainless steel scrap prices. Alternative furnace charge performance diverged — high-grade NPI prices remained in the doldrums this week, while high-carbon ferrochrome prices stayed flat, with limited overall impact on stainless steel scrap prices. The cost advantage of stainless steel scrap over high-grade NPI remained quite evident, and the strengthening of stainless steel finished product prices provided some support for stainless steel scrap prices, preventing downward fluctuations. However, constraining factors were equally significant — steel mills themselves faced considerable cost pressure and continued to show poor acceptance of high-priced raw materials, with a clear desire to bargain down prices during procurement; meanwhile, overall purchase demand for stainless steel scrap was weak, compounded by the generally weak trend of other alternative raw materials, further limiting the upside room for stainless steel scrap prices and making it difficult to break out of the stable pattern. Overall, the stainless steel scrap market this week exhibited a pattern of "limited support, notable constraints, and stable prices," with supporting and constraining factors counterbalancing each other, making it difficult to drive any significant price change. Stainless steel scrap prices are expected to remain largely stable in the near term.