[SMM Analysis] Macro sentiment boosts transactions, traders proactively clear inventory, and stainless steel inventory continues a slight destocking.

SMM, June 18 – This week, stainless steel social inventory continued its previous destocking trend, pulling back slightly again amid the off-season market. Total inventory in the two core markets of Wuxi and Foshan edged down slightly, from 932,900 mt as of June 11, 2026 to 932,200 mt as of June 18, down 0.08% WoW. Despite the traditional off-season with weak end-use demand, inventory continued to exhibit a mild destocking trend.

This week, the stainless steel market was in the traditional consumption off-season, with overall weak end-use demand. However, marginal improvement in macro sentiment led to a phase of renewed market trading. During the week, easing US-Iran tensions lifted risk appetite, driving SS futures sharply higher. Although the spot price increase was limited, it effectively repaired end-user pessimism, and early in the week, downstream purchasing enthusiasm picked up notably, bringing a period of improved spot trading. By mid-week, futures pulled back, and market trading enthusiasm cooled, without fundamentally reversing the backdrop of weak off-season demand. However, the supply side and distribution dynamics provided an effective offset. Expectations for steel mill maintenance and production cuts during the month continued to build, leading to expectations of reduced future market supply. At the same time, traders, facing the weak off-season market, generally adopted a proactive destocking approach, actively selling to accelerate inventory turnover. These multiple factors combined to drive a small destocking of inventory this week. Overall, the core reasons for the continued destocking this week were the recovery in futures that drove a phase of improved transactions, proactive inventory clearance by traders during the off-season, and expectations for steel mill production cuts. Short-term sentiment and circulation behavior offset the inventory buildup pressure from weak off-season demand. At present, real end-use demand has not materially recovered; most transactions are sporadic recoveries with insufficient sustainability, and the off-season characteristics of the market remain evident. Supply side, large-scale production cuts have yet to materialize, keeping overall supply relatively ample. In the short term, against a backdrop of persistently weak end-use demand, traders' selling pace and the actual implementation of steel mill maintenance will continue to dominate inventory changes. Inventory is likely to maintain a pattern of small fluctuations and mild destocking. Going forward, focus should be on tracking the pace of SS futures fluctuations, the sustainability of downstream end-use demand, and the actual progress of steel mill maintenance and production cuts.