SHANGHAI, Jul 29 (SMM) - As of July 28, the most-traded stainless steel contract fell to 15,280 yuan/mt overnight, a new low since May 21, 2021. The contract rallied in day trading, and once recorded a gain of 1.41%. The contract finally closed the day at 1.32%.
In the spot market, the average spot price of 304/2B (burr edge, in Wuxi) has been in a downward trend since July 13, with a collective drop of 5.7% in 11 trading days.
According to SMM research, the prices of 304 cold rolled coil in Wuxi and Foshan both dropped, while hot-rolled coil prices also fell slightly. Intraday stainless steel prices rebounded after the US Fed raised the interest rate as market expected, and the spread between spot and futures has been repairing. The social inventory of 304 stainless steel has been falling in both Wuxi and Foshan in July. 316L cold and hot-rolled coil prices were on the downward track. The prices of 201 stainless steel were flat, with low social inventory and muted demand, and the prices are likely to fall in the future.
According to SMM analysis, on the macro front, the market priced in the US Fed rate hike expectations in advance, and metals prices rose across the board after the monetary resolution was finally announced. On the cost side, steel mills active forced down raw material prices, and NPI prices were pressured by the constant inflows of Indonesia NPI. Ferrochrome was also in oversupply, triggering bearish sentiment in the market. Therefore, the market expects stainless steel prices to drop in the near future. Overall, the market remains on the sidelines. And SMM believes that stainless steel prices will remain on the downward track.