Futures boost stainless steel scrap rise, tax invoice constraints limit gains [SMM Stainless Steel Scrap Market Weekly Review]

[SMM Analysis] Futures Drive Finished Steel and Raw Material Prices Up; Stainless Steel Raw Materials Diverge While Profits Hold Steady This week, stainless steel finished products and various raw materials rose in tandem, with steel mill profits remaining generally stable. Based on 304 cold-rolled calculations, the profit margin from current raw material accounting recovered to 2.47%, while the profit margin from inventory raw material accounting stood at 2.88%. The nickel pig iron segment halted losses and strengthened this week. Driven by higher SS futures, stainless steel finished product prices rose and steel mill profit margins expanded, boosting market sentiment for NPI and increasing inquiries. Coupled with market talk that Indonesia's nickel ore quotas may be further tightened next year, upstream smelters and traders adopted a hold-back-from-selling stance, pushing high-grade NPI prices higher. As of Friday, the delivered duty-paid price of Indonesian high-grade NPI with 10-12% nickel content in China rose by 9.5 yuan per nickel unit. Stainless steel scrap also halted losses and strengthened. The rise in SS futures lifted finished products and high-grade NPI, steel mills raised their scrap procurement prices, and scrap quotes followed higher. However, this round of gains was driven more by expectations in futures, while the reverse invoicing policy continued to constrain goods circulation. Actual procurement volumes at steel mills remained limited, and market trading stayed sluggish. The cost advantage of stainless steel scrap over high-grade NPI provided bottom support, but end-use demand has yet to show substantial improvement, and prices are likely to consolidate on a strong note in the short term. As of Friday, the tax-exclusive price of mainstream 304 off-cuts in Shanghai rose by 450 yuan/mt. Chrome-related raw materials diverged from nickel-related materials and scrap, extending their weak downward trend. South African ferrochrome enterprises gradually resumed production, and with China's ferrochrome market already in oversupply, destocking pressure is expected to increase further going forward. Meanwhile, chrome ore prices pulled back, and ferrochrome costs...

[SMM Stainless Steel Daily Review] SS Resilience Stands Out Against Nonferrous Metals Pullback; Stainless Steel Spot Prices Follow Gains, Downstream Trading Cautious According to SMM on November 6, SS futures consolidated on a strong note today. Although nonferrous metals futures stopped rising and fell sharply today, SHFE nickel and SS did not follow the decline significantly, firmly holding yesterday's gains. As of the close, the most-traded SS contract settled at 14,135 yuan/mt. In the spot market, driven by the consecutive rise in SS futures, stainless steel spot prices moved higher in tandem. However, after the rapid price increase, cautious wait-and-see sentiment among downstream end-users continued to build, with market inquiry and trading activity pulling back, further intensifying the tug-of-war between longs and shorts. SS futures most-traded contract. At 10:15 a.m., SS2612 was quoted at 14,180 yuan/mt, up 135 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 190-590 yuan/mt. In the spot market, the average price of Wuxi cold-rolled 201/2B coil remained flat; for cold-rolled 304/2B coil with mill edges, the average price in Wuxi rose by 100 yuan/mt, and the average price in Foshan rose by 75 yuan/mt; the price of cold-rolled 316L/2B coil in Wuxi rose by 25 yuan/mt; for hot-rolled 316L/NO.1 coil, the quoted price in Wuxi rose by 50 yuan/mt; cold-rolled 430/2B coil in both Wuxi and Foshan remained flat. This week, the stainless steel market showed an independent strengthening trend driven by capital flows. SS futures rose against the backdrop of overall weakness in the nonferrous metals sector, climbing back above 14,100 yuan/mt during the week. At the start of the week, SHFE nickel and nonferrous metals...

[SMM Analysis] Futures gains drive price upticks and destocking, with stainless steel social inventory decline slowing SMM, November 5: This week, stainless steel social inventory continued to destock, but the decline narrowed significantly. Inventory in the two core markets of Wuxi and Foshan fell 0.22% WoW, with the inventory center further pulling back to the low range of the year. This week's modest destocking of stainless steel social inventory was mainly driven by spot price upticks and speculative purchases triggered by consecutive gains in SS futures. Warrant inventory has remained persistently low recently, and SS futures have shown a relatively independent strong trend. Futures gains drove spot prices higher, and under the "rush to buy amid continuous price rise and hold back amid price downturn" mentality and speculative demand, some traders and futures-spot institutions became more active in purchasing during the week, supporting continued destocking of social inventory. However, it is worth noting that downstream end-user clients remain cautious and on the sidelines amid fear of high prices and pessimism. The recovery in transactions remains concentrated in the circulation segment between traders and futures-spot institutions, with insufficient participation from actual end-user buying. The transaction structure is not fundamentally different from the earlier sentiment-driven destocking. More notably, the pace of destocking has slowed: stainless steel production schedules are expected to rebound in November, and subsequent market arrivals face marginal pressure to increase. Combined with the difficulty of a fundamental demand recovery at year-end and lingering macro headwinds from expectations for US Fed interest rate hikes, the market is gradually developing fear of high prices at elevated futures levels. Rush-to-buy purchases are turning more cautious, and further destocking of social inventory faces pressure. Overall, futures...