Favourable macro front supports stainless steel prices to rise, while demand restricts upward momentum, which remains weak [SMM Stainless Steel Spot Daily Review]

SMM reported on May 13 that amid the easing of China-US tariff policies, the futures prices of SS held steady above 12,900 yuan/mt today, but the overall trend was volatile, with further upward exploration facing resistance. The spot price was also driven up, showing a similar upward trend, but the rate of increase had slowed compared to yesterday. Following yesterday's price increase, the purchasing demand that had been suppressed by pessimistic wait-and-see sentiment in the market earlier was released, and transactions significantly improved. Today, transactions have somewhat weakened but remain better than before.

In the futures market, the most-traded 2507 contract was trading in a volatile manner. At 10:30 a.m., SS2506 was quoted at 12,910 yuan/mt, up 160 yuan/mt from the previous trading day. In the Wuxi region, the spot premiums/discounts for 304/2B stainless steel ranged from 350-500 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 13,175 yuan/mt in Wuxi and 13,150 yuan/mt in Foshan; the cold-rolled 316L/2B coils were priced at 23,850 yuan/mt in Wuxi and the same 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, significant adjustments are being made to China-US tariff policies: 91% of the tariffs imposed earlier will be removed, and among the 34% reciprocal tariffs, the imposition of 24% will be suspended for 90 days, with only 10% remaining. This outcome is significantly better than the market's previous general expectation of "retaining 40-60% tariffs," injecting a strong boost into the stainless steel futures market and driving futures prices higher. However, uncertainties at the policy level still persist. Coupled with the stainless steel market's supply remaining at historically high levels and the weakening of cost support compared to earlier periods, the market still faces multiple pressures. The subsequent trend of stainless steel prices will still need to closely monitor the actual recovery of end-use consumption in the downstream sector.