Futures Weakness Drags Down Stainless Steel Scrap, Off-Season Demand Weakness Suppresses Market [SMM Stainless Steel Scrap Weekly Review]

Published: Jul 3, 2026 15:51

Save

[SMM Stainless Steel Scrap Market Weekly Review] Futures Weakness Dragged Down Stainless Steel Scrap Prices; Off-Season Demand Slump Pressured Market This week, prices of 304 stainless steel scrap off-cuts in east China pulled back, with a quotation range of 10,350-10,450 yuan/mt; prices of the same specification stainless steel scrap in the Foshan area fell in tandem, with a price range of 10,200-10,500 yuan/mt. From the perspective of raw material production cost analysis, the current cost to produce stainless steel entirely using stainless steel scrap is about 14,520.18 yuan/mt, while the cost using high-grade NPI reaches 14,988.98 yuan/mt, with the two maintaining a favorable cost spread. Stainless steel scrap prices pulled back slightly this week. During the week, SS futures consolidated weakly, and the weak sentiment in the futures market transmitted to the spot market, driving stainless steel finished product spot prices to also pull back slightly; the decline in the substitute raw material high-grade NPI slowed down, reducing its drag on the market, but the overall atmosphere in the raw material market remained mediocre. Under the influence of the futures-spot linkage, stainless steel scrap prices edged down slightly in tandem. Overall, cost support is difficult to offset the bearish pressure from fundamentals. The market has now entered the traditional consumption off-season for stainless steel, with end-use demand lacking internal momentum, and the expected production schedules of stainless steel mills pulling back, directly leading to a simultaneous weakening of rigid demand for stainless steel scrap. Meanwhile, news about the supplementary quota for Indonesian nickel ore remains unresolved, and policy uncertainty in the industry chain has been rising, leaving the overall market sentiment cautious and wait-and-see. Although stainless steel scrap still maintains a decent economic advantage over high-grade NPI, providing bottom support for prices, under the dual pressures of weak futures and the off-season…

This week, prices of 304 stainless steel scrap off-cuts in east China fell back, with a quotation range of 10,350-10,450 yuan/mt; prices for the same specification scrap in Foshan dropped in tandem, within a range of 10,200-10,500 yuan/mt. An analysis of raw material production costs shows that the current cost of producing stainless steel entirely using scrap is approximately 14,520.18 yuan/mt, while the cost using solely high-grade NPI reaches 14,988.98 yuan/mt, still maintaining a significant cost spread.

Stainless steel scrap prices pulled back slightly this week. During the week, SS futures remained in the doldrums and consolidated, with weak sentiment spilling over to the spot market and driving spot prices of stainless steel finished products to pull back slightly in tandem. Meanwhile, the decline of alternative raw material high-grade NPI slowed, reducing its drag on the market, but overall raw material sentiment remained mediocre. Affected by the correlation between futures and spot markets, stainless steel scrap prices edged down in tandem.

Overall, cost support is hard to offset the bearish pressures from fundamentals. The market has now entered the traditional consumption off-season for stainless steel, with end-use demand lacking intrinsic momentum and steel mills' expected production schedules pulling back, directly leading to weakening rigid demand for stainless steel scrap. Meanwhile, the unresolved issue of Indonesia's additional nickel ore quotas has heightened policy uncertainties in the industry chain, and the overall market sentiment leans cautious and wait-and-see. Although stainless steel scrap still maintains a good economic advantage over high-grade NPI, providing bottom support for prices, under the combined impact of weak futures, off-season demand pullback, and uncertain policy expectations, market trading sentiment remains cautious, making it difficult to reverse the weak market structure. In the short term, stainless steel scrap prices may continue to be in the doldrums.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

9 hours ago

[SMM Stainless Steel Daily Review] Nonferrous Metals Sector Provided Support; Stainless Steel Futures Stopped Falling and Began Rising

[SMM Stainless Steel Daily Review] Nonferrous Sector Boosted; Stainless Steel Futures Stopped Falling and Began to Rise According to SMM news on August 17, SS futures stopped falling and rebounded. Although Friday’s night session remained weak, Monday’s open was lifted by a broad rally in nonferrous metals, and SS successfully reversed its decline and began to rise. By the close, the most-traded SS futures contract settled at 14,275 yuan/mt. Spot market, although SS futures had already staged a rebound, the weak trading pattern in the morning stainless steel spot market did not improve, and traders further lowered their quotes. Only as futures gradually rebounded did spot transactions show some recovery. The most-traded SS futures contract. At 10:15 a.m., SS2610 was at 14,220 yuan/mt, down 25 yuan/mt from the previous trading day. In Wuxi, spot premiums for 304/2B were in the 400-650 yuan/mt range. In the spot market, the average price of Wuxi cold-rolled 201/2B coils held steady; for cold-rolled mill-edge 304/2B coils, the Wuxi average fell 125 yuan/mt and the Foshan average fell 125 yuan/mt; prices of Wuxi cold-rolled 316L/2B coils were unchanged; for hot-rolled 316L/NO.1 coils, Wuxi quotes were unchanged; cold-rolled 430/2B coils in both Wuxi and Foshan were unchanged. This week, stainless steel futures were continuously disturbed by macro sentiment and overall maintained a weak pullback trend. During the week, news on Indonesia’s RKAB nickel ore approval repeatedly disrupted industry expectations. Coupled with hawkish US Fed policy remarks and the unresolved US-Iran geopolitical conflict, macro uncertainty in the market stayed high, and multiple bearish factors resonated to drag SS futures lower throughout the week…

9 hours ago

12 hours ago

[ Jindal Stainless Seeks Land for $4.2 Billion Greenfield Mill in Maharashtra ]

India's Jindal Stainless Limited (JSL) has officially begun scouting land in the state of Maharashtra to construct a new $4.2 billion greenfield steel mill. The proposed multi-phase facility targets an ultimate production capacity of 4 million metric tons of specialized stainless steel per year. Management expects to secure the necessary land within the next two quarters, aiming to operationalize the first phase within four years to supply emerging infrastructure and defense sectors.

12 hours ago

[ Outokumpu Starts Up Biocoke Plant in Finland to Cut Steelmaking Emissions ]

Finnish stainless steel producer Outokumpu inaugurated a new €30 million biocoke agglomeration plant at its integrated Tornio production site. The facility processes biochar into biocoke to replace fossil fuels used in ferrochrome smelting. Operating at full capacity, the new plant is expected to reduce the company's direct CO₂ emissions by up to 82,000 metric tons per year.

12 hours ago