[SMM Analysis] Futures Strengthened Combined with Pre-Holiday Stockpiling, Stainless Steel Social Inventory Continued Mild Destocking

Futures Strengthened Combined with Pre-Holiday Stockpiling, Stainless Steel Social Inventory Continued Mild Destocking. SMM, April 30: This week, stainless steel social inventory continued its destocking trend. Total inventory in the two core markets of Wuxi and Foshan declined slightly, from 949,400 mt on April 23, 2026 to 945,900 mt on April 30, down 0.37% WoW, with the destocking pace slowing compared to the previous period.

This week, driven by SS futures continuing to hold up well and breaking above highs since September 2023, market sentiment remained buoyed. Basis trading and arbitrage purchases by futures-spot institutions were relatively active, serving as a key driver of inventory decline. Meanwhile, although downstream end-user clients maintained a cautious wait-and-see attitude toward current high prices, with overall procurement focused on just-in-time procurement, consistent with the current market dynamics of "strong costs, weak demand," the approaching Labour Day holiday still prompted some end-users to release just-in-time procurement stockpiling demand, providing some support for destocking. Additionally, recent steel mill allocation to the market remained at relatively low levels, effectively easing inventory accumulation pressure. Combined with diversion of some supplies to other non-mainstream trading hubs, multiple factors jointly drove further decline in stainless steel social inventory this week. Overall, this week's further destocking was primarily driven by active basis arbitrage boosted by strengthening SS futures, limited just-in-time procurement stockpiling ahead of Labour Day holiday, low steel mill allocation volumes, and supply diversion to non-mainstream trading hubs. Current market sentiment was supported by futures and trended positive, but downstream end-users' cautious stance remained unchanged, pre-holiday stockpiling demand was limited in scale, and the sustainability of supply diversion still requires observation. Short-term inventory is expected to continue a mild destocking trend, with subsequent focus needed on futures direction, completion of pre-holiday stockpiling demand, changes in steel mill allocation pace, and supply diversion dynamics at non-mainstream trading hubs.