The atmosphere for stainless steel before the holiday was not favorable, with social inventory down 0.74%; transactions remained weak after futures recovery, and subsequent digestion will continue to be under pressure [SMM Analysis]

As of September 12, SMM stainless steel social inventory was 960,600 mt, down 1.27% MoM and 0.74% WoW. Specifically, 200-series stainless steel inventory was 279,500 mt, down 1.27% WoW and up 0.24% MoM; 300-series inventory was 553,200 mt, down 0.38% WoW and down 2.15% MoM; and 400-series inventory was 139,800 mt, down 1.05% WoW and down 0.82% MoM.

200-series: The total arrivals of 200-series decreased during the week, with CRC being more than HRC. After continuous decline since August, Tsingshan Group lowered the prices on Monday and provided agents with a discount of 200 yuan/mt. This week, the overall consumption of low-priced resources was decent. With both cold and hot-rolled stainless steel inventory in Wuxi digested, the inventory decreased by 2.26%. However, the total inventory remained high, and inventory digestion in Foshan was not good, with only a slight decrease of 0.64%.

300-series: The total arrivals of 300-series were normal this week. Futures, which had deeply declined during the week, began to slowly recover. However, downstream buyers had a strong wait-and-see attitude, the market sentiment was sluggish, and transactions were inactive. Agents had little willingness to pick up goods, and overall shipments were weak. There was still a significant drop in warehouse warrants during the week. Recently, most shipments from stainless steel mills were hot-rolled stainless steel, so while cold-rolled stainless steel inventory decreased mainly in warehouse warrants, there was an accumulation in hot-rolled stainless steel. Wuxi’s 300-series cold-rolled stainless steel inventory decreased by 1.65%, while hot-rolled stainless steel inventory increased by 0.47%. In Foshan, 300-series cold-rolled stainless steel inventory decreased by 0.59%, while hot-rolled stainless steel inventory increased by 3.6%. Currently, some mills still control market circulation resources, and actual local inventories remain high. Downstream demand remained weak, the holiday atmosphere was not good, and there was still pressure on subsequent digestion of 300-series inventory.

400-series: Recent arrivals from stainless steel mills have decreased. Spot prices remained stable, downstream restocked as needed, and overall inventory decreased. Inventory in Wuxi decreased by 1.27%, while Foshan faced sales pressure, leading to an inventory increase of 1.07%.