SS Contract to Move Rangebound with some Drops in December

SHANGHAI, Dec 15 (SMM) - In November, the stainless steel futures contract remained rangebound amid the frequently released macro policies. On November 11, the US Department of Labor announced the October CPI data, and the inflation rate was lower than expected, which enabled the US Fed to consider slowing down the pace of rate hikes. The SS contract surged by 3.3% accordingly. On the evening of November 28, the China Securities Regulatory Commission launched five optimal measures in terms of equity financing with immediate effect. These measures boosted the market confidence in the real estate industry, and the SS contract rose again. On November 30, US Fed Chairman Powell gave a dovish speech that the Fed prepared to slow down rate hikes at the December meeting. Moreover, China introduced more scientific COVID-19 control measures, and the domestic consumption has gradually improved. On the supply side, due to the high costs and poor orders received by the stainless steel mills, the total output of Chinese stainless steel dropped about 4.79% month-on-month in November, of which the output of 300-series stainless steel dipped 7.52% MoM. In the first half of December, the demand improved temporarily with the relaxation of COVID-19 control measures in China. And the stainless steel mills’ profit margins grew, encouraging the mills to resume the production. SMM expects that the stainless steel output will increase slightly MoM in December. The overall demand for stainless steel was relatively slack in November. In December, it is expected that the demand may pick up temporarily as downstream companies in some areas will restock raw materials ahead of schedule before the Chinese New Year. In November, prices of high-grade NPI and high-carbon ferrochrome fluctuated with some ups. The costs of stainless steel are firm, while the supply and demand shrink. To sum up, SMM believes that the SS contract will move rangebound with some drops in December.