[SMM Stainless Steel Daily Review] Geopolitical risks cool, stainless steel futures strengthen.

Published: Jun 15, 2026 13:52

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[SMM Stainless Steel Daily Review] Stainless Steel Futures Stabilize, Spot Trades Pick Up SMM reported on June 12 that SS futures stopped falling and stabilized. News of easing US-Iran conflict emerged again, nonferrous metal futures generally staged a recovery, and SS strengthened in tandem. As of midday close, the most-traded SS contract was quoted at 14,715 yuan/mt. In the spot market, driven by the strengthening of SS futures, market activity improved. In the morning session, both inquiries and transactions recovered, and traders raised their offers. The most-traded SS futures contract pulled back. At 10:15 a.m., SS2607 was reported at 14,705 yuan/mt, up 300 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi ranged from 365-915 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi remained flat; for cold-rolled 304/2B trimmed edge coil, the average price in Wuxi rose 50 yuan/mt, and in Foshan rose 50 yuan/mt; cold-rolled 316L/2B coil in Wuxi fell 200 yuan/mt; hot-rolled 316L/NO.1 coil in Wuxi was flat; cold-rolled 430/2B coil in both Wuxi and Foshan held steady. This week, stainless steel futures and spot prices both declined under pressure, as macro headwinds outside China dominated the market and off-season pessimism spread quickly. The industry’s outlook expectations weakened, end-users remained on the sidelines, and rigid demand stayed sluggish. Traders concentrated on selling to destock and offered discounts. On the futures front, overseas macro developments were the core driver this week. The US non-farm payrolls data significantly exceeded expectations, the unemployment rate stayed low, and the market delayed or even canceled expectations for a US Fed interest rate cut within the year…

According to SMM's June 15 report, SS futures showed an upward probing trend. Boosted by the positive news that the US and Iran reached a peace agreement and the Strait of Hormuz reopened, nonferrous metals futures strengthened across the board, and SS futures rose in tandem. By the midday close, the most-traded SS futures contract settled at 14,855 yuan/mt. In the spot market, although SS futures moved higher in a probing manner, the market has entered the off-season and macro uncertainty persists; downstream users' cautious, wait-and-see sentiment has not fully faded, so stainless steel spot offers tracked the gains only to a limited extent. However, market enquiries and transactions both picked up somewhat.

SS Futures – The Most-Traded Contract. As of 10:15 a.m., SS2607 was quoted at 14,855 yuan/mt, up 150 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi stood in the 215-765 yuan/mt range. In the spot market, for Wuxi cold-rolled 201/2B coil, the average price remained flat; for cold-rolled unedged 304/2B coil, average prices in Wuxi and Foshan both held steady; for cold-rolled 316L/2B coil in Wuxi, prices rose by 150 yuan/mt from the previous week; for hot-rolled 316L/NO.1 coil, offers in Wuxi stayed flat; and cold-rolled 430/2B coil prices in both Wuxi and Foshan remained stable.

This week, stainless steel futures and spot prices both came under pressure and moved lower. Macro headwinds from outside China dominated market sentiment, and pessimistic mood spread rapidly during the off-season. Industry expectations for the outlook weakened, end-user caution deepened, rigid demand remained persistently sluggish, and traders concentrated on selling at discounts to cut inventory. On the futures side, macro factors from abroad were the core driver. US non-farm payrolls data significantly beat expectations and the unemployment rate stayed low, leading the market to postpone or even cancel expectations for US Fed interest rate cuts within the year. The US dollar index strengthened to a near two-month high, broadly weighing on the valuation of the nonferrous sector. Dragged down by this, SS futures fell continuously in a one-sided decline, quickly breaching the previous support level of 14,500 yuan/mt, as bearish sentiment was released in full, further weakening sentiment across the entire industry chain. Regarding spot prices and inventory, the pace of spot price declines this week noticeably lagged that of futures, highlighting a divergence between the two. The sharp drop in futures weighed heavily on market mentality; traders’ willingness to sell and destock increased markedly, and low-priced cargoes continued to emerge in the market. Amid the traditional consumption off-season, downstream rigid demand lacked momentum, buying support was insufficient, and transactions were only modestly driven by low-priced cargoes, leaving overall performance subdued. On the supply side, some steel mills gradually carried out production cuts and maintenance, leading to a marginal contraction in industry supply. Coupled with traders actively clearing inventory, total social inventory continued its destocking trend and pulled back slightly, despite weak off-season demand. On the cost and profit side, stainless steel raw material prices largely resisted declines this week, diverging from the trend in finished steel prices. High-grade NPI saw limited declines, while stainless steel scrap and high-carbon ferrochrome prices remained firm, providing relatively strong bottom support from the raw material side. However, spot prices continued to fall. Weakening finished steel against rigid costs directly squeezed steel mill profit margins. Profit calculations show that the current profit margin for steel mills, based on spot raw materials, pulled back to roughly 1.9%. Hindered by earlier high-cost inventories, the profit margin based on raw material inventory costs narrowed further to 0.84%. Overall profitability contracted significantly, potentially strengthening steel mills' willingness to initiate further production cuts later. Overall, this week's decline in futures turned sentiment bearish, with off-season rigid demand remaining weak. Although steel mill maintenance and active destocking by traders drove a slight decline in inventories, providing some support to spot prices, this was not enough to reverse the broader weakening trend. Firm raw material prices formed a floor under spot prices, limiting deep downside, and the short-term market will likely persist in a pattern of weak futures, resilient spot prices, and thin trading. Key areas to monitor going forward include the trajectory of US Fed policy expectations, movements in the US dollar index, strength of support for SS futures, sustainability of downstream rigid demand, and progress in steel mill maintenance-led production cuts.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

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