The impact of macro policies remains unclear, with the market cautious and SS futures in the doldrums [SMM Analysis]

This week, the most-traded SS contract continued its previous in-the-doldrums trend. As of 10:30 a.m. on April 30, the SS2506 contract was quoted at 12,655 yuan/mt, down 15 yuan/mt WoW.

From a macro perspective, although the Trump administration signaled a reduction in tariffs on China, the policy's volatility exacerbated market uncertainty, and investors' concerns about the prolonged trade friction continued to suppress market sentiment. The domestic Political Bureau meeting deployed policies to "expand domestic demand and stabilize foreign trade," and regions such as Guangdong and Shanghai successively introduced consumption-boosting plans. However, the process of actual demand recovery was slow, and the positive effects of the policies had not yet been effectively transmitted to end-users. Against this backdrop, although SS futures remained in the doldrums, the range of fluctuations narrowed somewhat. Due to the continuous disruptions from previous policies and the fact that new consumption-stimulating measures had not yet been implemented, there was intense tug-of-war between longs and shorts in the market, and a strong wait-and-see atmosphere prevailed.

On the fundamental side, sluggish transactions remained the core issue in the spot market, and the stockpiling demand before the Labour Day holiday was not concentratedly released. Affected by the futures market, stainless steel enterprises actively adjusted their production structures, reducing the production of 304 stainless steel and increasing the production of other steel grades. However, the overall decline in industry production was limited.

Based on a comprehensive analysis, the current uncertainty surrounding the US tariff policy continues to disrupt the market. There is a strong wait-and-see sentiment among downstream end-users, and weak demand remains the key factor constraining the market. However, given that prices are already at a relatively low level, there is limited downside room for further declines. It is expected that in the short term, stainless steel prices will remain stable and continue to fluctuate.