SHANGHAI, Sep 29 (SMM) – Stainless steel futures entered sharp correction. The most-traded SHFE contract fell sharply after hitting highs on September 23, and closed at 19,690 yuan/mt today. The decline reached 12.2% for four trading days.
The Fed's continuous release of the hawkish statement resulted in an increase of the US dollar index, which broke through the weekly second resistance at 93.81 and rose to 93.89. Rising US dollar suppressed commodity prices. Some long positions chose to exit to avoid risks approaching the National Day holiday. The market is expected to see resumption of production after the holiday. There is no obvious bearish factors at the moment. The downstream restocking sentiment weakened, in spite of the approaching of the holiday. The arrivals of stainless steel declined due to output cut at mills. The market saw weak supply and demand. The recovery of stainless steel output is likely to be limited amid production restriction policies. The deliveries increased in the afternoon yesterday. The consumption rose slightly, and was muted today, indicating that the market is expected to see price increase after the holiday. The SHFE stainless steel contract prices are expected to rise slightly due to active bullish positions.