Daily Updates on SHFE Base Metals and Stainless Steel Warrants on July 3

[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...

[SMM Stainless Steel Scrap Market Weekly Review] SS Futures Strength Drives Slight Uptick in Stainless Steel Scrap, Off-Season Demand Weakness Caps Price Gains This week, prices for 304 stainless steel scrap off-cuts in east China edged up, with quotations ranging between 10,400-10,500 yuan/mt. Prices in Foshan rose in tandem, with a price range of 10,300-10,600 yuan/mt. An analysis of raw material production costs shows that the cost of producing stainless steel entirely from stainless steel scrap is approximately 14,607.48 yuan/mt, while the cost using high-grade NPI reaches 14,962.08 yuan/mt, with a cost spread persisting between the two. Stainless steel scrap prices edged up this week. SS futures strengthened overall during the week, and the positive sentiment from the futures side was smoothly transmitted to the spot market, driving a slight concurrent rise in spot prices for finished stainless steel. However, stainless steel mills continued to push for lower prices for high-grade NPI, and amid the tug-of-war between upstream and downstream, high-grade NPI prices held steady for the time being. Overall momentum from the raw material side remained weak, but stainless steel scrap rose in tandem with the strengthening pace of finished product spot cargoes, holding up well overall. With high-grade NPI prices remaining stable this week, the economic advantage of stainless steel scrap narrowed notably, and the cost substitution benefit weakened. In summary, futures provided support for market prices, but off-season fundamentals continued to cap price upside. The market is currently in the traditional consumption off-season for stainless steel, downstream end-use demand remains sluggish, overall industry production pulled back, and the rigid demand for stainless steel scrap weakened accordingly. The purchasing sentiment among steel mills turned cautious, and raw material procurement overall this week...

[SMM Analysis] Futures Consolidate on a Strong Note, but Off-Season Demand Weakness and Concentrated Arrivals Lead to a Slight SS Inventory Buildup SMM, July 23: This week, stainless steel (SS) social inventory ended its earlier destocking trend, stopping its fall and rebounding overall with a slight buildup, as off-season inventory pressure re-emerged. Total inventory in the two core markets of Wuxi and Foshan edged up, rising from 921,300 mt on July 9, 2026, to 929,900 mt on July 23, up 0.93% WoW, shifting from a mild destocking phase to a period of accumulation. During the week, SS futures extended their previous consolidation on a strong note, helping to repair market trading sentiment to some extent. This drove a recovery in spot market inquiry activity early in the week, and periodic transactions saw a short-term rebound. However, support from off-season demand was insufficient, and the boost in sentiment from futures only generated a pulse-driven market. After the release of these periodic transactions, downstream procurement pace quickly slowed, and spot trades returned to a mediocre state, with a lack of sustained purchasing power from end-users. On the supply circulation front, the key factor behind this week's inventory buildup was the concentrated arrival and warehouse entry of shipments previously delayed by typhoon and rainstorm weather. This, combined with steel mills maintaining a normal distribution pace, led to a marked increase in the volume of spot cargo released, temporarily raising pressure on spot supply. Against a backdrop of weak off-season end-user purchases and slowing cargo consumption, the growth from concentrated arrivals could not be effectively absorbed by the market, ultimately driving the slight buildup in social inventory. Overall, the underlying bearish factors for inventory growth were weak off-season rigid demand from end-users and a lack of sustained transactions. The key drivers for this week's buildup were the concentrated arrivals after the typhoon, combined with normal distribution from mills and an increase in spot supply releases. This week's inventory...