Stainless Steel Struggles to Break Free from Strong Supply and Weak Demand Situation, Futures Market Leads the Decline, Spot Cargo Follows [SMM Stainless Steel Daily Review]

Published: May 28, 2025 17:53

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[SMM Stainless Steel Daily Review: Stainless Steel Market Struggles to Break Free from Strong Supply and Weak Demand, with Futures Market Leading the Decline Followed by Spot Market] SMM reported on May 28 that today, the SS futures market broke away from its previous consolidation pattern, experiencing a significant decline, with the most-traded contract price once again falling below the 12,700 yuan threshold. The spot market continued to exhibit a sluggish trend, with transaction prices continuously declining under the dual impact of persistently weak downstream demand and a weakening futures market. Although news of production cuts at stainless steel mills frequently circulated in the market today, the actual scale of these cuts remains limited, and the substantive impact of supply-side reductions on the market will take time to materialize. Therefore, the stainless steel market is expected to remain in the doldrums in the short term. In the futures market, the most-traded 2507 contract saw a significant decline. At 10:30 a.m., SS2507 was quoted at 12,750 yuan/mt, down 85 yuan/mt from the previous trading day. In the Wuxi region, the spot premiums/discounts for 304/2B stainless steel ranged from 420-620 yuan/mt. In the spot market, cold-rolled 201/2B coils in both Wuxi and Foshan were quoted at 7,950 yuan/mt; cold-rolled trimmed 304/2B coils had an average price of 13,100 yuan/mt in Wuxi and the same in Foshan; cold-rolled 316L/2B coils were priced at 24,050 yuan/mt in Wuxi and the same in Foshan; hot-rolled 316L/NO.1 coils were quoted at 23,350 yuan/mt in both regions; and cold-rolled 430/2B coils were priced at 7,500 yuan/mt in both Wuxi and Foshan. Currently, the stainless steel market has entered the traditional consumption off-season, with notably weak downstream demand. However, on the supply side...

SMM May 28: Today, SS futures broke the previous consolidation pattern and experienced a sharp decline, with the most-traded contract price falling below the 12,700 yuan/mt threshold again. The spot market remained sluggish, with transaction prices continuously declining due to weak downstream demand and the weakening futures market. Although production cut rumors from stainless steel mills circulated frequently today, the actual scale of cuts remains limited, and the substantial impact of supply-side reductions on the market will take time to materialize. Therefore, the stainless steel market will likely remain in the doldrums in the short term.

Futures side, the most-traded SS2507 contract dropped significantly. At 10:30 am, SS2507 was quoted at 12,750 yuan/mt, down 85 yuan/mt from the previous trading day. In Wuxi, the spot premiums/discounts for 304/2B ranged between 420-620 yuan/mt. In the spot market, the prices of cold-rolled 201/2B coils in Wuxi and Foshan were both quoted at 7,950 yuan/mt. The average prices of cold-rolled 304/2B coils with mill edges were 13,100 yuan/mt in both Wuxi and Foshan. Cold-rolled 316L/2B coils were priced at 24,050 yuan/mt in both regions, while hot-rolled 316L/NO.1 coils were quoted at 23,350 yuan/mt in both locations. Cold-rolled 430/2B coils were uniformly priced at 7,500 yuan/mt in Wuxi and Foshan.

Currently, the stainless steel market has entered the traditional consumption off-season, with significantly weak downstream demand. However, supply-side production remains high, creating substantial sales pressure for steel mills and obvious inventory buildup among agents and traders, while social inventory continues to fluctuate at highs. Due to insufficient end-user orders, some futures-spot traders sold spot cargo at low prices after completing arbitrage in the futures market, with some goods circulating only within the trade chain without reaching end-users. Although the rebound in high-grade NPI prices, historically low stainless steel prices, and corporate losses provide some support, the market still faces downward pressure in the short term amid shrinking off-season demand and unchanged high-supply conditions if sales pressure persists.

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