SS Contract Rose for Several Trading Days, But the Fundamentals were Weak

SHANGHAI, Jan 3 (SMM) - The SS contract bottomed out last week. In terms of futures prices, the amount of warrant continued to increase, with more expected in the future. In the spot market, the spot prices of stainless steel were basically stable last week. The supply of spot goods produced by some brands was relatively tight, hence the prices rose slightly. At the end of the year, the spot prices were under pressure due to the increasing inventory and the demand for funds withdrawal. In addition, the downstream enterprises were less willing to purchase due to the extended impact of the pandemic. Most market players will remain wait-and-see until the Chinese New Year. In terms of costs, the prices of high-grade NPI rose slightly last week as the NPI plants held the prices firm amid the tight spot supply in the market. Meanwhile, the large-sized stainless steel plants that inquired recently may make some concessions. Therefore, the NPI prices are expected to rise in the short term. Last week, the prices of high-carbon ferrochrome were stable. The high-priced transactions were still thin despite the high bid prices, the tight spot supply and the restocking demand of stainless steel plants. As such, the prices of ferrochrome will remain stable in the short term. To sum up, despite the weak fundamentals, the decline in the futures prices is limited amid the strong cost support. SMM expects that the short-term spot prices of stainless steel will be stable with slight upside potential.