Downstream Terminals Remain Cautious, Stainless Steel Prices Run Steadily [SMM Daily Review of Stainless Steel Spot Cargo]

SMM reported on May 8 that the market was highly volatile today due to multiple news events. On one hand, the US Fed meeting sent hawkish signals, suggesting that the interest rate cut process might be delayed. On the other hand, Trump announced that a trade agreement would be reached with a major country that night, and the expectation of tariff reductions boosted market sentiment. Stimulated by these two factors, SS futures strengthened rapidly after the opening of the daytime session. However, the market rally could not be sustained. As nickel prices and ferrous metals series futures declined overall, SS futures came under pressure, with gains narrowing rapidly and turning into a pullback. Despite the upward momentum in the market, downstream end-users remained cautious in their procurement, with limited acceptance of high-priced resources. As a result, stainless steel spot prices remained stable overall and did not fluctuate significantly with futures.

In the futures market, the most-traded 2506 contract experienced an upward probe followed by a pullback. At 10:30 a.m., SS2506 was quoted at 12,780 yuan/mt, up 30 yuan/mt from the previous trading day. In the Wuxi region, the spot premiums/discounts for 304/2B stainless steel ranged from 340-540 yuan/mt. In the spot market, the cold-rolled 201/2B coils in both Wuxi and Foshan were quoted at 8,050 yuan/mt. The average price of cold-rolled trimmed 304/2B coils was 13,050 yuan/mt in Wuxi and 13,050 yuan/mt in Foshan. The cold-rolled 316L/2B coil was priced at 23,850 yuan/mt in Wuxi and 23,850 yuan/mt in Foshan. The hot-rolled 316L/NO.1 coil was quoted at 23,050 yuan/mt in both regions. The cold-rolled 430/2B coil was priced at 7,500 yuan/mt in both Wuxi and Foshan.

Currently, the supply side of the stainless steel market remains at a high level. Under the severe pressure of losses, producers are actively adjusting their strategies, significantly reducing the production of heavily loss-making 300-series stainless steel and shifting their production focus towards 200-series and 400-series products to optimize the steel grade structure. However, frequent policy changes in recent times have brought great uncertainty to the market. Downstream enterprises, concerned about the market outlook, have generally adopted a cautious and conservative business strategy, not only becoming more prudent in procurement but also experiencing a sustained slump in consumer demand. This imbalance between high supply and weak demand has become the core factor hindering the healthy development of the current stainless steel market.