According to SMM on September 23, SS futures opened stronger in the night session, buoyed by a higher open in SHFE nickel, with the contract continuing to climb and test higher levels. The intraday high touched 13,920 yuan/mt, and by the close, the most-traded SS contract settled at 13,840 yuan/mt. In the spot market, boosted by further strength in SS futures, coupled with recent news of stainless steel mill production cuts and just-in-time procurement ahead of the Mid-Autumn Festival and National Day holiday, overall trading volume remained limited. However, with the holiday approaching, buyers making just-in-time purchases saw their bargaining power diminish, and stainless steel agents and traders raised their quotes tentatively.
The most-traded SS futures contract. At 10:15 a.m., SS2611 was quoted at 13,855 yuan/mt, up 125 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the 415-715 yuan/mt range. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi was flat; for cold-rolled 304/2B coils with mill edges, the average price in Wuxi rose 75 yuan/mt, and the average price in Foshan rose 100 yuan/mt; cold-rolled 316L/2B coil prices in Wuxi were flat; hot-rolled 316L/NO.1 coil quotes in Wuxi were flat; cold-rolled 430/2B coils in both Wuxi and Foshan were flat.
This week, the overall market was dominated by a weak tone, with the nonferrous metals sector collectively hitting bottom, dragging SS futures down persistently, with an intraday low of 13,290 yuan/mt. Following the US Fed's rate hike, previously accumulated macro headwinds were released in concentrated fashion and largely exhausted for the time being, easing market pessimism at the margin. SS futures stopped falling and stabilized, staging a modest recovery, with momentum for further deep declines significantly weakening and the market consolidating at lows overall. The spot market extended the weak tone of a disappointing peak season, with end-use demand recovery falling well short of expectations and trading activity remaining persistently mediocre. The traditional "September peak season" has been thoroughly debunked, with no recovery growth emerging from downstream end-users. Combined with low willingness to stockpile ahead of the Mid-Autumn Festival and National Day holiday, end-users maintained a just-in-time procurement model without concentrated restocking, leaving overall market trading sluggish and confidence persistently weak. On the inventory side, marginal improvement emerged, with supply-demand pressure easing somewhat. September steel mill production schedules are expected to fall back, marginally shrinking supply growth pressure. Coupled with persistently declining futures warrant inventory, spot trading recovered modestly after futures stopped falling, and multiple factors together drove a slight destocking of stainless steel social inventory this week, with the loose supply-demand balance modestly repaired. Costs and profits continued to recover, with steel mill losses gradually easing. Against the backdrop of a generally weak finished steel market and persistently soft demand, steel mills showed a strong desire to bargain down raw material prices. During the week, core raw material prices such as NPI and stainless steel scrap accelerated downward, rapidly lowering the raw material cost center, effectively narrowing the price spread between finished steel and raw materials, and continuing to repair the loss-making position of stainless steel mills, with industry profitability pressure released in stages. But current cost support is generally weak, with raw material prices falling in tandem with finished steel, and bottom support is not firm, making it difficult to drive a trend reversal in prices. Overall, this week's stainless steel market presented a game of macro headwinds materializing, futures repairing at lows, peak-season demand being falsified, rigid demand remaining weak, inventory destocking slightly, and cost-related losses being repaired. In the short term, the failure of traditional peak-season expectations and weak industry fundamentals remain the core constraints, and with cost support lacking, stainless steel prices find it hard to break out of a low-level consolidation pattern. However, downside support is gradually emerging, with steel mill production schedules continuing to fall and social inventory showing no significant buildup. Combined with macro headwinds having run their course, insufficient momentum for further deep declines in futures, and spot prices having already pulled back to yearly lows, as well as the approaching critical window for 2027 Indonesian nickel ore quota approvals, market expectations are gradually repairing. Downside room for prices is limited going forward, and the market is likely to maintain low-level weak consolidation.
