[SMM Analysis] Futures Recovery Boosts Trading, Stainless Steel Social Inventory Continues Modest Destocking

SMM May 28 reported that stainless steel social inventory continued its mild destocking trend this week. Total inventory across the two core markets of Wuxi and Foshan pulled back slightly, declining from 939,200 mt on May 21, 2026 to 936,300 mt on May 28, down 0.31% WoW, with the pace of destocking slowing down somewhat.

SS futures edged up this week, and the recovery in futures effectively restored market trading sentiment, driving a recovery in spot stainless steel transactions at the beginning of the week. Combined with steel mill agents maintaining price-holding strategies and actively shipping to facilitate market circulation, downstream end-user rigid demand remained stable at this stage, with no obvious weakening signals of the consumption off-season emerging in the short term. The resilience of rigid demand continued to support market cargo digestion, and multiple favorable factors jointly drove stainless steel social inventory to continue pulling back slightly this week. Overall, the recovery in futures driving improved transactions, steady release of downstream rigid demand, and proactive shipments by steel mills collectively dominated the slight destocking trend in inventory this week. Supply side, although some stainless steel mills have announced maintenance and production cut plans for June, steel mill production margins remain within a reasonable range, production sentiment is moderate, and the actual magnitude of subsequent production schedule reductions is expected to be relatively limited. Currently, the stainless steel market is highly sensitive to fluctuations in SS futures, and the market is about to fully enter the traditional consumption off-season. End-use demand faces pullback pressure going forward, and overall market uncertainty has increased. Short-term inventory is expected to maintain a slight destocking trend, but the degree of destocking may slow down further. Subsequent focus should be on the pace of SS futures movements, the sustainability of downstream rigid demand, and the implementation of steel mill maintenance and actual production schedule changes.