NPI Demand Falls Significantly amid Intensive Maintenance of Stainless Steel Mills

[SMM Stainless Steel Daily Review] SS Futures Stopped Falling; Off-Season Sales Pressure Capped Upside in Spot Stainless Steel According to SMM’s July 29 report, SS futures generally stopped falling and regained some ground. Supported by a weaker US dollar index and broad gains in base metal futures, SS underwent a similar recovery. By market close, the most-traded SS contract settled at 14,515 yuan/mt. In the spot market, spot stainless steel quotes had already declined on the previous afternoon, dragged by weak futures. Today, although the recovery in SS futures boosted inquiry activity in the spot market, traders’ strong willingness to sell in the off-season limited the extent of the rebound in spot quotes. SS most-traded futures contract. At 10:15 a.m., SS2609 was at 14,540 yuan/mt, flat from the previous trading day. Spot premiums for 304/2B in Wuxi were in the 380-830 yuan/mt range. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was unchanged; the average price for cold-rolled, mill-edge 304/2B coil fell 25 yuan/mt in Wuxi and 25 yuan/mt in Foshan; the price for cold-rolled 316L/2B coil in Wuxi was unchanged; the quoted price for hot-rolled 316L/NO.1 coil in Wuxi was unchanged; cold-rolled 430/2B coil prices in Wuxi and Foshan were both flat. This week, favorable macro and industry factors combined to support nickel and stainless steel futures in consolidating on a strong note. On the macro front, US inflation expectations pulled back, while continued geopolitical tensions between the US and Iran roiled market risk sentiment. On the industry front, expectations that the growth in Indonesia’s supplementary RKAB nickel ore quotas would be limited continued to ferment, effectively steadying the bottom for nickel prices and... .

[SMM Stainless Steel Daily Review] SS Futures Continue to Pull Back, Stainless Steel Spot Prices Drop According to SMM on July 28, SS futures moved further downward in a pullback. Dragged down by the overall decline in nonferrous metals futures, SS futures fell in tandem. By the close, the most-traded SS contract settled at 14,515 yuan/mt. In the spot market, impacted by the successive pullback in SS futures, market confidence continued to weaken. Moreover, stainless steel mills that had previously halted production resumed operations, increasing the supply of materials. The market, already with weak consumption, faced mounting absorption pressure, and stainless steel offers also pulled back. The most-traded SS futures contract, SS2609, at 10:15 am, was at 14,540 yuan/mt, down 170 yuan/mt from the previous trading day. Wuxi’s 304/2B spot premiums were in the range of 430-830 yuan/mt. In the spot market, cold-rolled 201/2B coil average price in Wuxi remained flat; cold-rolled unedged 304/2B coil average price in Wuxi (-50 yuan/mt) and Foshan (-50 yuan/mt); cold-rolled 316L/2B coil price in Wuxi (-75 yuan/mt); hot-rolled 316L/NO.1 coil in Wuxi remained flat; cold-rolled 430/2B coil in both Wuxi and Foshan remained flat. This week, macro and industry tailwinds converged, supporting nickel and stainless steel futures to maintain a consolidating on a strong note trend. On the macro front, US inflation expectations pulled back, alongside the ongoing US-Iran geopolitical conflict that continued to disrupt market risk sentiment. On the industrial front, earlier expectations of limited incremental growth in Indonesia's RKAB nickel mine supplementary quotas continued to simmer, effectively stabilizing the bottom of nickel prices and driving SHFE nickel to drift higher...

[SMM Analysis] Stainless Steel Products and Costs Edge Up in Tandem, Steel Mill Profits Stable This week, stainless steel product prices and production costs edged up in tandem, while steel mill smelting profits remained basically stable overall. Based on calculations for 304 cold-rolling, the profit margin this week was 2.15% when accounting for raw materials at current prices and 1.11% when accounting for inventory raw materials, indicating that stainless steel mills still maintain certain smelting profits. Nickel-based raw materials side, high-grade NPI prices were largely stable this week. Although SHFE nickel and SS futures held up well overall during the week, the current traditional consumption off-season for stainless steel meant steel mills' purchase demand for NPI remained persistently weak, with very few actual transactions concluded recently. Amid the tug-of-war between longs and shorts, NPI prices remained steady this week. As of this Friday, the delivered duty-paid price for China's 10-12% grade Indonesian high-grade NPI remained stable at 1,132.5 yuan per nickel unit. Stainless steel scrap prices edged up this week, lifted by stronger SS futures driving spot prices higher. However, the temporarily stable high-grade NPI prices narrowed scrap's economic advantage. The current traditional consumption off-season persists, downstream demand is sluggish, and steel mills are cautious in purchasing, mainly transacting on a need-to basis. Under the dual constraints of weak demand and diminishing substitution benefits, upward momentum for stainless steel scrap was insufficient. In the short term, it will maintain largely stable consolidation supported by futures resilience, with limited upside room. As of this Friday, mainstream 304 off-cuts prices in Shanghai rose by 200 yuan/mt, quoted at 10,450 yuan/mt. Chrome-based raw materials side, high-carbon ferrochrome prices operated stably this week. Although ferrochrome supply remains relatively ample currently, coupled with demand pulling back amid off-season production cuts for stainless steel, recent high-cost ferrochrome...