Weak downstream demand restricts upward momentum in stainless steel prices [SMM Stainless Steel Spot Daily Review]

SMM reported on May 9 that stainless steel prices rose slightly this week. Influenced by the expectations of domestic interest rate cuts and RRR cuts, as well as the Sino-US negotiations, market confidence has somewhat recovered, and spot prices have risen slightly, with some enterprises attempting to raise prices. After the Labour Day holiday, a brief period of concentrated restocking brought a small peak in transactions. However, as the effects of the policies remained unclear, downstream procurement returned to a cautious wait-and-see stance, and market activity rapidly cooled. Meanwhile, the operating rate of stainless steel mills remained high, while the prices of raw materials such as nickel and chromium continued to weaken. Despite the current low prices of stainless steel, there is still a lack of effective upward momentum.

In the futures market, the most-traded contract 2506 rose slightly and then pulled back. At 10:30 a.m., SS2506 was quoted at 12,710 yuan/mt, down 70 yuan/mt from the previous trading day. In the Wuxi region, the spot premiums/discounts for 304/2B stainless steel ranged from 410 to 610 yuan/mt. In the spot market, the cold-rolled 201/2B coils in Wuxi and Foshan were both 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 coils were priced at 23,850 yuan/mt in Wuxi and 23,850 yuan/mt in Foshan; the hot-rolled 316L/NO.1 coils were quoted at 23,050 yuan/mt in both regions; and the cold-rolled 430/2B coils were both priced at 7,500 yuan/mt in Wuxi and Foshan.

Currently, the supply side of the stainless steel market continues to fluctuate at highs. Facing the pressure of losses, producers have reduced the production of the heavily loss-making 300-series stainless steel and instead increased the output of 200-series and 400-series products to optimize the steel grade structure. However, influenced by recent policy changes, market uncertainty has significantly increased. Downstream enterprises are generally cautious, with procurement behavior becoming increasingly conservative and consumer demand remaining sluggish. This situation of supply-demand imbalance has become the main constraint on the current development of the stainless steel market.