SS Contract Rebounded at the End of Last Week, and the Spread between the Spots and Futures Narrowed Somewhat

Published: May 23, 2022 11:29 (GMT+8)

Source: SMM

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In the first half of last week, the SS contract dropped sharply as the steel mills continuously lowered the quotes and the LME nickel prices plummeted.

SHANGHAI, May 23 (SMM) - In the first half of last week, the SS contract dropped sharply as the steel mills continuously lowered the quotes and the LME nickel prices plummeted. The price spread between spots and futures remained at around 1,000 yuan/mt even though the spot prices fell. Besides, the market could still see a decrease in warrants. Meanwhile, the downstream generally held a wait-and-see attitude and only purchased on rigid demand. In fact, the sharp drop in futures prices was aroused by the market sentiment and the influence of funds. Last Friday, the prices rebounded. On the supply side, the inventory dropped sharply due to the limited arrivals and the increase in pick-up. However, steel mills got a high in-plant inventory. Delong, which has a large market share, cut the production again and reduced the output of cold-rolled coils. In addition, the traders held firm to the prices last Friday. Therefore, stainless steel prices may stop falling. On the cost side, 3 series stainless steel consumed extremely low pure nickel, so the cost mainly depended on the NPI prices. The prices of NPI dropped as the increase in production of Indonesian NPI exceeded expectations, and then the prices stabilised in light of nickel ore prices. In short, stainless steel prices were still supported by the costs, and the recovery of consumption in the future is of utmost concern. SMM believes that the prices of stainless steel will remain stable with some upward potential this week.

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The above representation and data is based on market information SMM believes to be reliable at the time of acquiring as well as the comprehensive assessment by SMM research team, and any and all information provided in this article is for reference only. This article does not constitute a direct recommendation for investment or any decisions in any form and clients shall act on their own discreet and any decisions made by clients are not within the responsibility of SMM.

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