Brief analysis of futures trends: In early February, influenced by the slowdown in expectations of the Federal Reserve's interest rate cuts and the active profit-taking closure of long positions due to risk aversion during the Spring Festival, the decline in stainless steel futures prices occurred. Additionally, an increase in approvals for Indonesian nickel ore RKAB alleviated short-term tightness in nickel ore supply, fostering bearish sentiment in the oversupplied market. Subsequently, bolstered by domestic macroeconomic positives, such as the central bank's release of historical highs in social financing scale, and positive news in the real estate sector, prices rebounded.
Entering March, the anticipated peak season demand failed to materialize, with high levels of stainless steel inventory posing digestion challenges. The dissipation of sentiment related to accelerated RKAB approvals further contributed to the weak trend in futures prices.
Spot prices for February 304/2B coils with mill edges (Wuxi) fluctuated, with a monthly increase of approximately 1.42%. According to SMM research, influenced by the Spring Festival holiday, spot prices remained relatively stable in February, with good downstream buying activity after the holiday. However, in March, spot prices weakened, with a 0.55% decrease on the 25th compared to the previous day, marking a decline of about 5% from February's average. SMM research indicates weak downstream demand for stainless steel, with steel mills overly optimistic about March, resulting in excessive production increases. This exacerbates the already high social inventories of stainless steel, leading to further oversupply. The fundamentals indicate strong supply and weak demand, with the dissipation of nickel ore sentiment gradually causing nickel pig iron prices to fall, thereby weakening stainless steel prices.
Supply side: SMM data shows that total stainless steel production in China in February was approximately 2.6077 million tons, a decrease of about 9.69% month-on-month and 7.81% year-on-year. By series, the production of 200 series stainless steel was approximately 709,000 tons, an increase of about 3.20% month-on-month but a decrease of about 21.57% year-on-year; 300 series stainless steel production was approximately 1.394 million tons, a decrease of about 11.82% month-on-month and 5.44% year-on-year; 400 series stainless steel production was approximately 504,700 tons, a decrease of about 19.24% month-on-month but an increase of about 12.03% year-on-year. Additionally, in February, Indonesia's stainless steel production totaled approximately 425,000 tons, an increase of about 11.84% month-on-month and 51.79% year-on-year. During February, as stainless steel market entered the Spring Festival holiday, some steel mills underwent maintenance shutdowns, while state-owned steel mills adjusted production rhythms despite not undergoing maintenance during the holiday. The rebound in prices of 200 series stainless steel in February, coupled with stable raw material prices, widened profit margins, prompting some integrated production enterprises to switch production lines to 200 series. Furthermore, with the completion of maintenance at steel mills in Guangxi, production of 200 series increased by approximately 22,000 tons month-on-month. The 300 series is the main product of stainless steel enterprises, which was significantly affected by maintenance during the Spring Festival, leading to a decrease of approximately 187,000 tons month-on-month in February. The 400 series is mainly produced by domestic state-owned enterprises. Due to production rhythm adjustments during the Spring Festival, production of 400 series stainless steel decreased by approximately 120,300 tons month-on-month. In March, downstream and terminal enterprises of stainless steel are in the stage of recovery. According to SMM research, a steel mill in South China had good order placement for March futures, and production is expected to be released this month. However, with nickel-based raw material prices disrupted by sentiment related to Indonesian RKAB, price volatility is significant. With the accelerated progress of quota approvals in March and the end of the rainy season in the Philippines, sentiment on the supply side eased, and nickel-based raw material prices are expected to trend weakly, possibly leading to a downward shift in steel mill cost lines, driving production growth. Overseas, it is reported that Indonesian stainless steel plants are expected to switch some nickel iron production lines to high-grade nickel in March, leading to a decline in stainless steel production. SMM expects domestic stainless steel production in March to be approximately 3.2485 million tons, an increase of 24.57% month-on-month. By series, the production of 200 series stainless steel is approximately 922,000 tons, an increase of about 30.04% month-on-month; 300 series stainless steel production is approximately 1.7205 million tons, an increase of about 23.42% month-on-month; and 400 series stainless steel production is approximately 606,000 tons, an increase of about 20.07% month-on-month.
![[SMM Berita Kilat Nikel] Pembaruan Harian — 2 September 2026](https://imgqn.smm.cn/usercenter/qLeLR20251217171733.jpg)
