Stainless Steel Inventory During Chinese New Year Shows No Significant Increase Compared to Previous Years; Post-Holiday Prices May Face Relatively Small Pressure [SMM Analysis]

In late January, the stainless steel market gradually entered a holiday mode, with reduced port arrivals in the Wuxi region. Although large public warehouses still received shipments, market demand remained weak as downstream procurement was mostly completed before the holiday, posing challenges for inventory digestion. As of February 6, the total social inventory of stainless steel reached 883,900 mt, with an increase of approximately 52,400 mt during the Chinese New Year holiday, up by about 5.93% compared to pre-holiday levels, and a monthly increase of 37,600 mt. By series: the 200-series inventory increased by approximately 11,900 mt (up 4.48%); the 300-series inventory accumulated an increase of 37,300 mt (up 7.63%); and the 400-series inventory increased by 3,200 mt (up 2.47%). The 200-series saw the smallest inventory growth due to production cuts or shutdowns at several stainless steel mills, coupled with some downstream stockpiling completed before the holiday. Although the 300-series had the highest arrivals, its inventory growth during the Chinese New Year period was not significant compared to previous years. Post-holiday, market inquiries have been relatively inactive, and the pressure from holiday inventory increases on spot prices has yet to materialize. Most traders have not resumed operations, and close attention is still needed on how downstream consumption will digest the inventory.

In early February, social inventory is expected to continue to accumulate slightly. According to the SMM survey, despite the firm performance of spot prices, end-use consumption is expected to remain pessimistic. From late February to March, as inventory pressure rises, spot prices may face some downward pressure. However, since this year's inventory growth during the Chinese New Year period is relatively weaker than in previous years, the downward pressure may be relatively small.

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