[SMM Analysis] Futures Weakened with Rigid Demand Providing Support, Stainless Steel Social Inventory Slightly Destocking

SMM May 14 reported that stainless steel social inventory continued its mild destocking trend this week. Total inventory across the two core markets of Wuxi and Foshan pulled back slightly, declining from 955,200 mt on May 7, 2026 to 947,100 mt on May 14, down 0.85% WoW, exhibiting mild destocking characteristics.

SS futures were in the doldrums this week. On Thursday, uncertainty surrounding the Fed Chairman transition policy caused SS futures to drop sharply, putting macro sentiment under pressure. However, the spot market showed strong resistance to declines, with stainless steel spot prices falling only narrowly without following the wild swings in futures. Supply side, steel mills' earlier cargo distribution pace was relatively low, limiting market delivery pressure; traders remained cautious in purchasing high-priced cargoes, with weak speculative purchasing appetite. Demand side, rigid demand transactions in the market were moderate this week, with end-user rigid demand cargo pick-up pace remaining steady, largely unaffected by the weak futures performance. Rigid demand resilience supported continued inventory drawdown, collectively driving the slight pullback in social inventory this week. Overall, despite futures being under pressure and persistent macro uncertainties this week, firm spot prices, low steel mill deliveries, and resilient downstream rigid demand jointly drove the mild destocking. Currently, the high production schedule pattern at steel mills has not changed, supply-side pressure persists, and futures may maintain wild swings amid the uncertain macro environment. Combined with the traditional peak consumption season gradually approaching its end, whether downstream demand can sustain its current resilience remains to be observed. Short-term inventory is expected to maintain mild fluctuations, with subsequent focus needed on SS futures movement pace, steel mill delivery and distribution conditions, and the sustainability of downstream rigid demand.