Daily Updates on SHFE Base Metals and Stainless Steel Warrants

[SMM Analysis] Cost Fluctuations Under News-Driven Disturbances, Stainless Steel Profits Narrowed Stainless steel product prices and production costs pulled back slightly in tandem this week, leading to narrowed overall smelting profits at steel mills. Based on 304 cold-rolling calculations, the profit margin for the week stood at 1.7% when calculated with current raw materials, and 1.84% with inventory raw materials. Stainless steel mills still retained some smelting profits. For nickel-based raw materials, high-grade NPI prices consolidated on a strong note this week. During the week, SHFE nickel and SS futures experienced wild swings amid news of Indonesia’s RKAB supplementary quota, which led to fluctuations in NPI prices. Downstream steel mills are currently in the off-season for consumption and showed limited acceptance of high-priced raw materials. Moreover, the price swings further amplified the cautious wait-and-see sentiment, keeping overall purchasing activity subdued. As of Friday, the price of Indonesia-origin high-grade NPI with 10-12% grade in China rose 1.5 yuan/mt per nickel unit, to 1,138 yuan/mt per nickel unit on a cif basis including tax. Stainless steel scrap prices remained largely stable this week. Affected by the Indonesian news, SS futures saw wild swings, while spot products pulled back slightly but showed notable resilience. High-grade NPI prices held up well, and with the tug-of-war between longs and shorts, stainless steel scrap held steady, supported by its cost advantages. While expectations improved for better rigid demand amid the higher August production schedule, end-use demand in the off-season remained sluggish, steel mill profits were constrained, and the desire to bargain down prices persisted, limiting overall upside room. In the short term, prices are expected to maintain a broadly steady, consolidating pattern. As of Friday, mainstream 304 off-cuts in Shanghai were unchanged at 10,450 yuan/mt. For chrome-based raw materials, high-carbon ferrochrome prices pulled back slightly this week. Although the market expects stainless steel output to increase in August...

[SMM Stainless Steel Scrap Weekly Review] Cost Advantages Underpin Stainless Steel Scrap Holding Steady; Weak Off-Season Demand Caps Upside Room This week, the price of 304 stainless steel scrap off-cuts in east China remained unchanged, with a quotation range of 10,400-10,500 yuan/mt; prices in Foshan pulled back slightly, within a range of 10,200-10,500 yuan/mt. An analysis of raw material production costs shows that the cost of producing stainless steel using only stainless steel scrap is about 14,607.48 yuan/mt, while using only high-grade NPI reaches 14,968.22 yuan/mt, with the two maintaining a stable cost spread. Stainless steel scrap prices were broadly stable this week. Indonesian news disrupted market sentiment during the week, and SS futures swung wildly. The futures fluctuations transmitted to the spot market, driving concurrent swings in spot stainless steel products, but overall prices only pulled back slightly, highlighting the resilience of spot prices. The price of the alternative raw material high-grade NPI continued to consolidate on a strong note, and the overall tone on the raw material side was relatively steady. Caught in a tug-of-war between bullish and bearish factors, stainless steel scrap prices remained stable during the week. Overall, cost advantages and production resumption expectations provided support, but end-user off-season fundamentals continued to suppress price increases. The market is still in the traditional stainless steel consumption off-season, and downstream end-user demand for finished steel products is generally weak, leaving the market without a sustained upward driver from end-user demand. Although the market expects stainless steel production schedules to improve in August, which may lift rigid demand for stainless steel scrap, and the current economic advantages of stainless steel scrap remain in place, providing potential bullish support for the market…

[SMM Stainless Steel Daily Review] Nonferrous Metals Strengthening Drives SS Futures to Stop Falling and Rebound, Spot Stainless Steel Inquiry Weak with Limited Upward Momentum According to SMM on August 7, SS futures generally stopped falling and rebounded. The nonferrous metals sector strengthened collectively today, driving SS prices to rise in tandem. As of the midday close, the most-traded SS contract settled at 14,640 yuan/mt. In the spot market, although SS futures gave a clear signal to stop falling and rebound, purchase demand from downstream was largely released in the mid-week when prices were high. Intraday market purchase inquiries remained weak, and the upward momentum of spot offers from traders was very limited. The most-traded SS futures contract. At 10:15 a.m., SS2609 settled at 14,570 yuan/mt, up 105 yuan/mt from the previous trading day. Spot premiums for 304/2B in the Wuxi region were in the 400-750 yuan/mt range. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi held steady; for cold-rolled mill edge 304/2B coil, the average price in Wuxi fell by 75 yuan/mt, and in Foshan by 50 yuan/mt; cold-rolled 316L/2B coil prices in the Wuxi region were flat; hot-rolled 316L/NO.1 coil offers in Wuxi remained unchanged; cold-rolled 430/2B coil prices in both Wuxi and Foshan were flat. This week, stainless steel futures were disturbed by both industry news and capital flows, presenting wild swings overall, with a fierce tug-of-war between longs and shorts. During the week, news about Indonesia's RKAB nickel ore supplementary quota repeatedly disturbed market expectations, and combined with shifts in capital flows on futures, SS futures first rose then fell, once exploring upward during mid-week...