Futures strength drives scrap rise, off-season rigid demand caps gains at a controllable level [SMM Stainless Steel Scrap Market Weekly Review]

[SMM Analysis] Futures Recovery Lifts Finished Steel, Raw Materials Drift Lower, Expanding Steel Mill Profits This week, stainless steel finished product prices and production costs drifted higher in tandem, with finished steel gains outpacing the overall performance of raw materials, driving a WoW expansion in steel mill smelting profits. Based on 304 cold rolling calculations, the profit margin stood at 2.39% using current raw material costs and 1.07% using inventory costs this week, with spot profitability resilience having achieved a clear recovery. Nickel-based raw materials: High-grade NPI prices generally grinded lower and pulled back this week, as a futures rebound and spot purchases formed a pronounced tug-of-war. During the week, SHFE nickel and SS futures both consolidated higher in tandem. Upstream smelters and traders showed relatively ample willingness to hold prices firm, but downstream stainless steel mills held relatively cautious expectations for the off-season outlook, with weak sentiment in raw material procurement and the strategy of pushing for lower prices continuing to be implemented. No concentrated restocking demand was released in the market, and the NPI price center shifted lower amid the tug-of-war between longs and shorts. As of this Friday, the domestic arrival tax-inclusive price of Indonesian high-grade NPI with 10-12% Ni content fell 4.5 yuan per nickel unit to 1,132.5 yuan per nickel unit. Stainless steel scrap prices rose with relative strength this week, supported by the futures recovery, displaying characteristics of strong resilience but limited gains. Driven by stronger SS futures, market sentiment for scrap recovered somewhat. Moreover, stainless steel scrap still held a stable cost-competitive substitution advantage over the weaker NPI, providing bottom support for prices. However, the market is currently in the traditional consumption off-season, with weak end-user rigid demand curbing overall demand for finished steel. Coupled with tight availability of tax invoices for stainless steel scrap and steel mills continuously pushing for lower purchase prices, market trading activity was restrained, making it difficult for prices to open upside room...

[SMM Analysis] Futures Recovery Spurs Phased Transactions and Arrival Constraints, Stainless Steel Inventory Stops Rising and Pulls Back SMM, July 16 – This week, stainless steel social inventory ended its previous inventory buildup trend, stopped rising and pulled back overall, with marginal easing of inventory pressure. Total inventories in the two core markets of Wuxi and Foshan declined notably, from 943,700 mt on July 9, 2026 to 921,300 mt at the latest period, down 2.37% WoW. The off-season inventory accumulation trend saw a phased reversal. During the week, SS futures strengthened and rose again, effectively repairing previously weak market sentiment. Coupled with spot price increases that created reasonable room for traders to offer discounts, the market’s “rush to buy amid continuous price rise and hold back amid price downturn” mentality was released intensively. Downstream end-user phased restocking demand kicked in, market transactions recovered markedly from the previous sluggish pattern, and destocking efficiency improved significantly. At the same time, typhoon weather disrupted regional logistics this week, restricting the pace of arrivals. Insufficient replenishment of spot supply in the market further tightened circulating resources from the supply side. Driven by the phased recovery in transactions and reduced arrivals, this successfully offset the inventory buildup pressure from weak off-season rigid demand, pushing social inventory to steadily pull back this week. Overall, the stronger futures repairing market sentiment, traders’ discounts promoting shipments, and typhoon-restricted arrivals were the key drivers behind the halt in rise and pullback of stainless steel inventories this week. Although real rigid demand from end-users during the off-season has not yet recovered materially and sustained transaction momentum remains insufficient, short-term sentiment-driven demand and circulation contraction formed an effective offset, effectively easing the previous inventory buildup pressure. At this stage, stainless…

[SMM Stainless Steel Daily Review] SS Futures Stop Rising and Pull Back, Spot Prices Hold Steady while Transactions Cool According to SMM on July 17, the SS futures showed a subdued consolidation trend. Weighed down by the overall weakness in the nonferrous metals sector, SS futures moved lower simultaneously, with the most-traded SS contract closing at 14,645 yuan/mt. In the spot market, boosted by yesterday's SS futures gains, spot stainless steel prices were generally raised yesterday afternoon, with transactions gradually recovering. However, today's futures stopped rising and pulled back; although spot prices remained stable for the time being, transactions weakened. SS most-traded futures contract: At 10:15 a.m., SS2608 was reported at 14,795 yuan/mt, up 130 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the 225-575 yuan/mt range. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was flat; for cold-rolled raw edge 304/2B coil, the average price rose 100 yuan/mt in Wuxi and 75 yuan/mt in Foshan; for cold-rolled 316L/2B coil in Wuxi, prices were flat; for hot-rolled 316L/NO.1 coil, prices in Wuxi were flat; cold-rolled 430/2B coil prices were flat in both Wuxi and Foshan. This week, macro-wise, the US CPI data pulled back, leading to cooling inflation expectations and a modest recovery in market risk appetite. Additionally, Indonesia's Ministry of Energy and Mineral Resources (ESDM) clarified that additional nickel ore production quotas for this year would be only moderate and limited, signaling limited growth potential and a sustained tight supply pattern for raw materials. This provided solid underlying support for the spot market, driving SHFE nickel and SS futures to stop falling and rebound. Regarding spot cargo and inventory, steel mills held prices firm to underpin the market...