Stainless Steel Futures Fluctuate, Spot Transactions Mediocre; 304 Cold-Rolled Cost and Profit Under Pressure [SMM Analysis]

Published: Feb 28, 2025 12:15

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[SMM Analysis: Stainless Steel Futures Fluctuate, Spot Transactions Mediocre, 304 Cold-Rolled Costs and Profits Under Pressure] This week, the price of the stainless steel 2505 futures contract showed a fluctuating trend. Data on the costs, prices, and profit margins of 304 stainless steel cold-rolled coils indicated a continuous decline in both costs and prices, leading to compressed profit margins. The market's supply-demand imbalance is prominent, with weak demand and relatively sufficient supply. In the short term, the stainless steel market is likely to maintain the current pattern, posing challenges to corporate profitability.

This week, the price of the stainless steel 2505 futures contract showed a fluctuating trend. Data on the cost, price, and profit margin of 304 stainless steel cold-rolled coils indicated a continuous decline in both cost and price, compressing profit margins. The market's supply-demand imbalance was prominent, with weak demand and relatively sufficient supply. In the short term, the stainless steel market may maintain the current pattern, posing challenges to corporate profitability.

From the raw material perspective, price fluctuations of key raw materials such as high-grade NPI, imported nickel plates, and stainless steel scrap significantly impacted stainless steel production costs. Among them, the transaction price of high-grade NPI rose on February 28: a nickel iron plant in Indonesia recorded a transaction price of 995 yuan/nickel (tax-included, ex-warehouse), with a transaction volume of tens of thousands of mt and delivery scheduled for late March. The profit margin for 304 cold-rolled stainless steel remained at a low level, even negative, with cold-rolled coil producers facing significant cost pressure and profit compression.

The cost decline may be attributed to factors such as lower raw material prices, improvements in production processes, or economies of scale. Meanwhile, the price drop was mainly due to relatively sufficient market supply and persistently weak demand. Downstream industries, such as construction and home appliances, showed low purchase willingness, intensifying market competition and making it difficult for prices to rise.

》Click to View SMM Stainless Steel Spot Historical Prices

》Click to View SMM Stainless Steel Industry Chain Database

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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