Daily Updates on SHFE Base Metals and Stainless Steel Warrants

[SMM Stainless Steel Daily Review] Nickel Prices Drag Futures Lower While Just-in-Time Procurement Provides Support; Stainless Steel Spot and Futures Diverge on First Trading Day After Holiday According to SMM on October 8, on the first trading day after the National Day holiday, SS futures consolidated lower, dragged by SHFE nickel. By the close, the most-traded SS contract settled at 13,455 yuan/mt. In the spot market, although SS futures fell notably, transaction activity improved thanks to post-holiday restocking demand in surrounding markets, and stainless steel spot prices saw limited declines. SS most-traded futures contract. At 10:15 a.m., SS2611 was quoted at 13,530 yuan/mt, down 165 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 640-1,040 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi was flat; for cold-rolled 304/2B coils with mill edges, the average price in Wuxi fell 25 yuan/mt, and the average price in Foshan fell 50 yuan/mt; cold-rolled 316L/2B coil prices in Wuxi were flat; hot-rolled 316L/NO.1 coil quotes in Wuxi were flat; cold-rolled 430/2B coils in both Wuxi and Foshan were flat. Before the holiday, the stainless steel market overall showed a consolidating pattern of external weakness and internal stability, a falsified peak season, and a balance between longs and shorts. Expectations for a traditional September-October peak season recovery completely fell through, end-use demand remained persistently weak, downstream stocking largely wound down ahead of the long holiday, and the market saw only sporadic just-in-time transactions, with overall trading sluggish and the demand side continuing to pressure spot prices. Futures showed an independent, resilient trend, not deeply following the decline amid weakness in nonferrous metals and SHFE nickel, with strong support from low valuations. Spot...

Two unions at Antofagasta’s Centinela mine began a legal strike at 8:00 a.m. local time on Oct. 7 after mandatory mediation ended without an agreement. The company said the action covers 709 workers, or 22% of its direct workforce, and could create operational difficulties, although its production outlook remains unchanged. Centinela’s 2026 molybdenum guidance is 3,000–3,500 tonnes, with about 1,400 tonnes produced in H1. No concentrator shutdown or molybdenum-output loss has been confirmed. The impact will depend on strike duration and disruption to critical mining and maintenance roles.

[SMM Analysis] September-October peak season disappoints, hard to rise or fall: stainless steel pre-holiday review and post-holiday outlook Before the holiday, the stainless steel market showed a consolidating pattern of external weakness and internal stability, peak season falsification, and a balance between longs and shorts. Expectations for a traditional September-October peak season recovery completely fell through, end-use demand remained weak, downstream stocking largely wound down ahead of the long holiday, and only sporadic rigid demand transactions remained in the market. Overall trading was sluggish, and the demand side continued to weigh on spot prices. Futures moved independently and showed resilience, not following the deep declines in nonferrous metals and SHFE nickel, with strong support from low valuations. Spot prices remained firm overall. The cost side continued to improve. Upstream nickel-based and chromium-based raw material prices kept pulling back, and the price spread between finished products and raw materials repaired, reversing the earlier persistent losses. Profitability at steel mills gradually recovered. On the supply side, expectations for production cuts continued to build, and industry supply contracted marginally. Combined with market prices at yearly lows, this effectively limited the downside. The inventory side shifted from decline to increase, ending the earlier destocking pace. Affected by weak end-user offtake and rising market arrivals, social inventory accumulated again, and supply pressure in the industry rebounded somewhat. Overall, weak demand and inventory accumulation created bearish factors, while low valuations, production cuts providing a floor, and profit recovery offered support. The tug-of-war between longs and shorts was balanced, and the market consolidated at lows. After the holiday, the stainless steel market is likely to continue moving sideways with a weak supply-demand tug-of-war, and the probability of a one-sided rise or fall is low. The demand side remains the core constraint. Expectations for a peak season recovery have been falsified, end-use demand is weak overall, and post-holiday production resumptions will proceed gradually, making concentrated restocking unlikely...