SMM, October 15: This week, stainless steel social inventory reversed its holiday accumulation trend and shifted to destocking overall. Total inventory across the two core markets of Wuxi and Foshan fell from 951,700 mt on October 8, 2026, to 920,900 mt, down 3.24% WoW. Inventory pressure built up during the holiday was released in a concentrated manner, with total inventory essentially pulling back to pre-holiday levels.
This week's stainless steel market inventory drawdown was mainly driven by the phased, concentrated realization of post-holiday restocking demand. During the Mid-Autumn Festival and National Day holidays, end-use operations stalled, downstream stocking willingness before the holiday was insufficient, and social inventory continued to accumulate during the holiday. After the holiday ended, downstream purchasing and restocking demand was released in a concentrated manner, driving rapid destocking of accumulated inventory and easing social inventory pressure. This week showed clear characteristics of concentrated post-holiday destocking. However, it should be noted that this round of destocking was mainly driven by concentrated post-holiday restocking of rigid demand, rather than a substantive recovery in end-use demand. As restocking demand was gradually fulfilled during the week, market transactions returned to sluggishness, and destocking momentum weakened marginally. Meanwhile, stainless steel prices have continued to decline recently, market confidence is insufficient, downstream wait-and-see sentiment has intensified, purchasing is mainly as needed, and substantive end-use recovery remains weak. On the supply side, although October stainless steel production schedules declined further and expectations for production cuts at steel mills continued to build, under the current pattern of persistently weak demand, the pace of supply contraction is not enough to fully offset the demand shortfall, and social inventory still faces accumulation pressure.
Overall, the concentrated release of post-holiday restocking demand and the concentrated digestion of inventory accumulated during the holiday were the core reasons for this week's MoM destocking of stainless steel social inventory. This round of destocking represents a phased correction due to holiday timing dislocation, rather than trend destocking driven by peak-season demand. At present, expectations for a September-October peak season recovery continue to fall short, end-use demand recovery remains insufficient, and market trading sentiment has returned to sluggishness. In the short term, the post-holiday restocking dividend has been largely exhausted, weak demand remains the core factor dominating inventory trends, and coupled with price weakness suppressing restocking willingness, room for further destocking of social inventory is limited, with inventory pressure persisting. Going forward, close attention should be paid to the sustainability of post-holiday end-use rigid demand recovery, the pace of steel mill production cuts in October, changes in market arrivals, and the progress of social inventory destocking.
