SHANGHAI, Nov 29 (SMM) - The SHFE SS2112 contract rose slightly last week and hit the highest level at around 19,200 yuan/mt. The SS2112 price was higher than spot prices and over 1,000 yuan/mt higher than the SS2201 contract.

However, the prices were mainly pushed up by the overall market sentiments and restrictions on the deliveries of warrants. The demand of stainless steel remains weak and is expected to weaken further, which will not support the prices to move upward.

The supply and demand contradiction was prominent at fundamentals. The consumption is expected to decline in the traditional off season and holiday, while the supply is likely to increase as the steel mills resume production. The raw material prices dropped as well, so the cost support weakened. Therefore, the stainless steel prices are expected to remain in a downward trend. SS2201 contract is expected to trade between 16,200-18,000 yuan/mt this week.