SS Contract Crash after Moving Sideways amid Shrinking Demand and Growing Inventory

SHANGHAI, Feb 6 (SMM) - SS contract rose slowly after the CNY holiday, while it plummeted last Thursday. The US Fed announced to raise the interest rate by 25 basis points, which was in line with market expectations and cast a limited impact on the futures prices. On the supply side, a stainless steel mill in east China shipped more actively to the market last week. On the demand side, the operating rates of downstream companies remained low, and it will still take some time for the terminal demand to be released. The short-term mismatch of supply and demand led to a large accumulation of inventory in the market, weighing on the futures prices. The prices of high-grade NPI rose somewhat. Stainless steel mills had to accept high raw material prices, but the NPI prices also bore pressure from the slumping SS contract prices, which forced the NPI sellers to lower their quotes. It is expected that the NPI prices will remain stable in the short term. Prices of high-carbon ferrochrome grew last week. The retail prices continued apace, but the downstream demand did not fully recover. The market players were more cautious about buying high-priced goods. On the other hand, ferrochrome prices were still strongly supported by the chrome ore prices. SMM presumes that the ferrochrome prices may run steadily in the short term. To sum up, the SS contract bore huge pressure last week, but the prices gained firm cost support. SMM believes that the SS contract prices will fall slowly this week.