SS Contract will Remain Rangebound with Some Downward Potential this Week

SHANGHAI, Oct 17 (SMM) - Last week, the SS contract dropped first and then rebounded strongly. Last Thursday, the US considered imposing a retaliatory ban on Russian aluminium, and then SHFE aluminium soared following LME aluminium. Accordingly, the SS contract grew slightly. Last Friday, it was reported that a large steel mill may reduce its output in October due to problems with raw material supply. Although the news has not been verified by SMM, it cast a certain impact on market sentiment. As a result, the SS contract rose by 4.69%. On the fundamentals, the total output of stainless steel across China soared in September, and so did the output of all series of stainless steel. After the National Day holiday, the downstream demand was acceptable. The market mainly witnessed transactions stemming from terminal restocking, and the demand transmission was relatively smooth. In addition, the social inventory of 300 series stainless steel continued to fall slowly. SMM believes that the spot prices are expected to remain rangebound. Stainless steel prices were still strongly supported by the costs last week. The high-grade NPI supply remained tight, while some steel mills were eager to purchase raw materials. The short-term high-grade NPI prices will rise slightly. Costs of high-carbon ferrochrome stood high, and steel mills were expected to ramp up their production, which may increase the demand for high-carbon ferrochrome and further tighten the spot high-carbon ferrochrome supply. Therefore, the high-carbon ferrochrome prices will fluctuate with some upward potential in the short term. To sum up, SMM believes that the prices of the SS contract will remain rangebound with some downward potential this week.