Stainless Steel Spot Stabilized Before the Holiday, Inventory Buildup Wave May Follow After the Holiday [SMM Analysis]

This week, stainless steel spot prices remained stable, with the market relatively sluggish. As of January 24, SMM Wuxi region's 304 cold-rolled coil prices were quoted at 13,000-13,300 yuan/mt, with an average price up 120 yuan/mt WoW; hot-rolled coil prices were 12,400-12,600 yuan/mt, with the average price unchanged from last week.

In terms of supply, as the Chinese New Year approaches, most steel mills nationwide implemented production cuts, though the reductions were limited. Some steel mills in east and south China have started maintenance and are expected to resume production on the eighth day of the lunar new year. This week, stainless steel social inventory increased by 1.02% MoM. Specifically, in Wuxi, 200-series inventory rose 0.86%, 300-series increased 1.58%, and 400-series decreased 1.04%; in Foshan, 200-series rose 0.88%, 300-series increased 1.76%, and 400-series decreased 0.91%. On the demand side, with the holiday starting, market transactions were sluggish, and upstream and downstream demand remained at low levels.

In terms of raw materials, this week, NPI prices rose slightly, while prices for high-carbon ferrochrome, high-silicon SiMn alloy, EMM, and stainless steel scrap remained stable, providing continued support for market prices. Post-holiday, market inventory is expected to continue increasing, with potential inventory accumulation, and spot prices are likely to remain stable or decline slightly.

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