Positive factors and improved fundamentals led to a strong rise in SS contracts

Positive factors and improved fundamentals led to a strong rise in SS contracts

The SS contract rose strongly last week. As of April 19, SS contract 2409 closed at 14,405 yuan/mt, up 120 yuan/mt compared with the previous trading day. Trading volume increased by 15,713 lots to 264,925 lots, and open interest increased by 14,439 lots to 131,506 lots. Last week, stainless steel prices rose strongly to 14,000 yuan/mt and then fluctuated downward. However, on Thursday, affected by market news, they began to rise sharply again, up about 610 yuan/mt WoW. The non-ferrous sector performed well last week. Base metals in the domestic market rose across the board. At the close of Friday's midday trading, SHFE nickel prices rose 1.44%, tin up 2.96%, copper up 1.7%, and stainless steel up 1.56%. On the macro level, on April 12, the "Implementation Rules for Housing Voucher Resettlement of Urban Village Renovation Projects in Huangpu District, Guangzhou Development Zone, Guangzhou" was officially issued. The favorable policies on the real estate sector boosted market sentiment. Overseas, in the early morning of April 13, the US and the UK announced new trading restrictions on Russia: Starting from April 13 (Saturday), global major metal exchanges are not allowed to use Russian aluminum, copper and nickel produced on or after April 13. This policy brought positive sentiment to the nickel market. Both LME and SHFE nickel prices rose, elevating stainless steel future prices. Moreover, rising NPI prices also supported stainless steel prices. Fundamentally, stainless steel downstream transactions were quite hot last week. The spot price was higher than the previous limits set by steel mill groups. Social inventory fell after the concentrated arrival. Despite large pressure from warehouse receipts, the overall fundamentals were favorable amid tight supply and reduced shipments by steel mills. The market news on Thursday boosted the stainless steel prices again. In the short term, the SS contract will still run strongly.

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