The price of the most-traded SS2505 futures contract fluctuated downward, primarily due to the supply-demand imbalance in the stainless steel fundamentals [SMM Analysis].

This week, the most-traded SS 2505 futures contract prices overall showed a fluctuating downward trend. The opening price on Monday was 13,170 yuan/mt, dropping to the week's lowest point of 13,000 yuan/mt on Wednesday, then rebounding slightly and closing at 13,085 yuan/mt on Friday.

From a macro perspective, US inflation continued to exceed expectations, and the US Fed's interest rate cut was below market expectations. This week, Fed Chairman Jerome Powell reiterated his hawkish stance of "not rushing to cut interest rates" during a congressional hearing. This indicates that, given the current resilience of the US economy and the uncertainties surrounding Trump’s policies, inflation levels play a crucial role in the Fed's interest rate cut decisions. The strong performance of the US Consumer Price Index (CPI) in January further underscores the need for caution in the Fed's rate cut decisions. However, from the macroeconomic outlook for H1, the US economy is likely to experience a mild slowdown in growth. Meanwhile, the resilience of inflation may limit further tariff escalations, keeping market attention focused on the Fed's future rate cut possibilities.

From a fundamental perspective, after the Lantern Festival, the market has essentially transitioned out of the Chinese New Year holiday mode, but transactions remain at low levels. Traders are cautious in procurement, while steel mills continue to deliver goods, with shipments arriving at ports, leading to a continuous increase in social inventory. Currently, the stainless steel market fundamentals still exhibit a supply-strong, demand-weak pattern, with subdued downstream demand and significant challenges in inventory digestion. However, supported by raw material prices, stainless steel prices face downward pressure but with limited declines. Overall, it is expected that next week, the most-traded SS 2505 futures contract prices will remain stable or drop slightly.

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