[SMM Analysis] Off-Season Demand Weakens, Traders Actively Clear Inventory; Stainless Steel Inventory Sees Minor Destocking

SMM, June 11 – This week, stainless steel social inventory continued the previous destocking trend, with total inventory pulling back slightly again. Total inventory in the two key markets of Wuxi and Foshan declined from 940,400 mt on June 4, 2026, to 932,900 mt on June 11, down 0.8% WoW, maintaining a slight destocking momentum during the off-season.

This week, macro headwinds outside China continued to ferment, with SS futures declining successively, driving stainless steel spot prices lower simultaneously and intensifying overall market pessimism. Moreover, the industry officially entered the traditional consumption off-season, with wait-and-see sentiment among downstream end-users staying high. Actual just-in-time procurement was relatively weak, and overall spot market transactions remained sluggish, with the demand side exerting inventory buildup pressure on stocks. However, the supply side and circulation segment formed strong offsets, effectively counterbalancing the inventory accumulation risk from weak off-season demand. On one hand, multiple steel mills gradually implemented production cuts and maintenance work within the month, leading to reductions in production schedules. On the other, the continuous decline in futures worsened market concerns about the future, with traders generally holding bearish expectations. The market focused on actively selling and reducing their own inventories, with widespread concessions to clear stocks, thus accelerating the turnover of spot goods in the market. Amid this tug-of-war between supply and demand, stainless steel social inventory pulled back slightly further this week. Overall, weakness in downstream just-in-time procurement during the off-season and persistently sluggish transactions are potential bearish factors for inventory buildup, while marginal supply contraction from steel mill maintenance and concentrated active destocking by traders were the core supports for continued destocking this week. Moving forward, it will be necessary to closely track the impact of SS futures fluctuations on market sentiment, the progress of steel mill maintenance and production cuts, and marginal changes in downstream just-in-time procurement during the off-season.