Stainless Steel Costs and Prices Pull Back Synchronously, Steel Mill Profits Remain Basically Stable [SMM Analysis]

Published: Jul 3, 2026 16:12

Save

[SMM Analysis] Stainless Steel Costs and Prices Pull Back in Tandem, Steel Mill Profits Remain Basically Stable This week, stainless steel prices and production costs fell together, and steel mill profit margins remained basically stable. Based on 304 cold-rolled as the benchmark, the profit margin calculated with current raw materials was 2.07%, while that using inventory raw materials was 1.33%. Nickel-based raw material cost side, high-grade NPI prices showed a pullback trend this week. During the week, SHFE nickel and SS futures were in the doldrums overall. Although there were widespread expectations of tight supply for high-grade NPI and upstream smelters and traders maintained firm offers, stainless steel mills' production schedule expectations pulled back, leading to weaker demand, and coupled with the simultaneous decline in stainless steel prices, the industry's acceptance of high-priced supply was very limited, and market transactions remained sluggish. As of this Friday, high-grade NPI with mainstream grade of 10%-12% fell by 8 yuan per nickel unit, closing at 1,133 yuan per nickel unit. Stainless steel scrap market, stainless steel scrap prices pulled back slightly this week. The weak futures market transmitted downward to spot cargo, and combined with sluggish off-season demand and reduced steel mill production schedules, rigid demand weakened further. Although steel scrap had an economic advantage over NPI, providing floor support for prices, uncertainty over Indonesian policies kept the market in a wait-and-see stance. Under the weight of bearish fundamentals, short-term stainless steel scrap prices are expected to continue to be in the doldrums. As of this Friday, the mainstream 304 off-cuts price in the Shanghai region fell by 100 yuan/mt, with the latest quotation at approximately 10,400 yuan/mt. Chromium-based raw material cost side, high-carbon ferrochrome prices continued to edge down this week. High-carbon ferrochrome production remained high...

This week, stainless steel prices and production costs fell in tandem, while steel mill profit margins remained basically stable. Using 304 cold rolling as the calculation benchmark, the profit rate based on current raw material costs was 2.07%, and the profit rate based on inventory raw material costs was 1.33%.

On the nickel-based raw material cost side, high-grade NPI prices trended downward and pulled back this week. During the week, SHFE nickel and SS futures remained largely in the doldrums. Although the market widely expected a tight supply of high-grade NPI, and upstream smelters and traders maintained firm offers, the expected pullback in stainless steel production schedules led to weaker demand. Coupled with declining stainless steel prices, the market’s acceptance of high-priced cargoes was very limited, and transactions remained sluggish. As of this Friday, mainstream high-grade NPI with 10%-12% nickel content declined by 8 yuan per nickel unit, closing at 1,133 yuan per nickel unit.

In the stainless steel scrap market, scrap prices pulled back slightly this week. Weakness in the futures market transmitted to spot prices, and amid the industry off-season with sluggish demand and reduced steel mill production schedules, rigid demand weakened further. Although steel scrap has a cost advantage over NPI, providing floor support for prices, uncertainty over Indonesian policies kept the market largely on the sidelines. Under the pressure of bearish fundamentals, stainless steel scrap prices are expected to continue consolidating at weak levels in the short term. As of this Friday, the price of mainstream 304 off-cuts in Shanghai fell by 100 yuan/mt, with the latest quotation at around 10,400 yuan/mt.

On the chrome-based raw material cost side, high-carbon ferrochrome prices continued to edge down this week. Production of high-carbon ferrochrome remained high, and port inventories of chrome ore continued to surge, fueling growing expectations of oversupply. Combined with the seasonal stainless steel demand downturn leading to lowered production schedules and reduced demand, transactions for ferrochrome remained weak, and prices continued to edge down. As of this Friday, mainstream high-carbon ferrochrome prices in Inner Mongolia fell by 50 yuan/mt (50% metal content) WoW, closing at 8,100 yuan/mt (50% metal content).

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

38 mins ago

[SMM Analysis] Futures Consolidating on a Strong Note Fail to Offset Weak Rigid Demand in the Off-Season, and Concentrated Arrivals Lead to a Minor Inventory Buildup of Stainless Steel.

[SMM Analysis] Futures Consolidate on a Strong Note, but Off-Season Demand Weakness and Concentrated Arrivals Lead to a Slight SS Inventory Buildup SMM, July 23: This week, stainless steel (SS) social inventory ended its earlier destocking trend, stopping its fall and rebounding overall with a slight buildup, as off-season inventory pressure re-emerged. Total inventory in the two core markets of Wuxi and Foshan edged up, rising from 921,300 mt on July 9, 2026, to 929,900 mt on July 23, up 0.93% WoW, shifting from a mild destocking phase to a period of accumulation. During the week, SS futures extended their previous consolidation on a strong note, helping to repair market trading sentiment to some extent. This drove a recovery in spot market inquiry activity early in the week, and periodic transactions saw a short-term rebound. However, support from off-season demand was insufficient, and the boost in sentiment from futures only generated a pulse-driven market. After the release of these periodic transactions, downstream procurement pace quickly slowed, and spot trades returned to a mediocre state, with a lack of sustained purchasing power from end-users. On the supply circulation front, the key factor behind this week's inventory buildup was the concentrated arrival and warehouse entry of shipments previously delayed by typhoon and rainstorm weather. This, combined with steel mills maintaining a normal distribution pace, led to a marked increase in the volume of spot cargo released, temporarily raising pressure on spot supply. Against a backdrop of weak off-season end-user purchases and slowing cargo consumption, the growth from concentrated arrivals could not be effectively absorbed by the market, ultimately driving the slight buildup in social inventory. Overall, the underlying bearish factors for inventory growth were weak off-season rigid demand from end-users and a lack of sustained transactions. The key drivers for this week's buildup were the concentrated arrivals after the typhoon, combined with normal distribution from mills and an increase in spot supply releases. This week's inventory...

38 mins ago

55 mins ago

[SMM Stainless Steel Daily Review] SS futures fell and pulled back, stainless steel spot transactions weakened and quoted prices held steady.

[SMM Stainless Steel Daily Review] SS Futures Edge Lower and Pull Back, Stainless Steel Spot Transactions Weaken and Quotes Hold Steady On July 24, SMM reported that SS futures showed an overall pattern of declining and pulling back. Nonferrous metals futures broadly pulled back, with SHFE nickel and SS futures weakening and pulling back in tandem. As of the close, the most-traded SS futures contract settled at 14,770 yuan/mt. In the spot market, affected by the weakening of SS futures and the concentrated release of earlier demand, market inquiries became less active, overall transactions weakened, and purchases were mainly need-based. However, with steel mill guidance prices remaining stable and spot prices having not previously followed the uptrend in futures, spot quotes continued to hold steady. Most-Traded SS Futures Contract. At 10:15 a.m., SS2609 traded at 14,690 yuan/mt, down 155 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi stood in a range of 330-730 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi was flat; for cold-rolled mill-edge 304/2B coil, average prices in Wuxi and Foshan were both flat; the price of cold-rolled 316L/2B coil in Wuxi fell by 75 yuan/mt; for hot-rolled 316L/NO.1 coil, quotations in Wuxi fell by 50 yuan/mt; cold-rolled 430/2B coil prices in both Wuxi and Foshan were flat. This week, a confluence of favorable macro and industry factors supported nickel and stainless steel futures, which consolidated on a strong note. On the macro front, US inflation expectations pulled back, while the US-Iran geopolitical conflict continued to unsettle market risk sentiment. On the industry front, the earlier limited growth in Indonesia’s RKAB nickel ore supplementary quotas...

55 mins ago

20 hours ago

[SMM Stainless Steel Daily Review] SHFE nickel boost lifts SS futures, stainless steel spot price rise lags, low-priced cargo transactions moderate.

20 hours ago