Stainless Steel Market in Stalemate, Prices Remain Stable for Now [SMM Stainless Steel Daily Review]

SMM News on June 4: Today, driven by the overall strength of ferrous metals series futures, the SS futures market rose in tandem. However, the spot market reacted indifferently, with transactions mainly driven by just-in-time procurement. The overall trading atmosphere remained sluggish, and traders lacked confidence in the market outlook. Despite the current low prices of stainless steel and limited room for further price declines due to news of production cuts by steel mills, downstream consumer demand is significantly weak. The market is dominated by wait-and-see sentiment, and market activity is unlikely to improve significantly in the short term.

In the futures market, the most-traded 2507 contract fluctuated upward. At 10:30 a.m., SS2507 was quoted at 12,660 yuan/mt, up 10 yuan/mt from the previous trading day. In the Wuxi region, the spot premiums/discounts for 304/2B stainless steel ranged from 470-670 yuan/mt. In the spot market, the cold-rolled 201/2B coils in Wuxi and Foshan were both quoted at 7,950 yuan/mt. The average price of cold-rolled trimmed 304/2B coils was 13,100 yuan/mt in Wuxi and 13,100 yuan/mt in Foshan. The cold-rolled 316L/2B coils were priced at 24,050 yuan/mt in Wuxi and 24,050 yuan/mt in Foshan. The hot-rolled 316L/NO.1 coils were quoted at 23,350 yuan/mt in both regions. The cold-rolled 430/2B coils were priced at 7,500 yuan/mt in both Wuxi and Foshan.

Currently, the stainless steel market has fully entered the traditional consumption off-season, with persistently weak downstream demand. Although stainless steel production has declined since March, it remains at historically high levels, leading to a significant surplus in market supply and high social inventory. At present, market transactions are mainly concentrated on low-priced warrant cargoes, while non-standard high-priced cargoes are mainly purchased on a just-in-time basis, resulting in low overall trading activity. Although stainless steel enterprises are generally facing losses and several steel mills have announced production cuts, these measures have not yet effectively boosted the spot market amid the dual pressures of weakening market demand and high inventory. From the raw material side, driven by expectations for production cuts by stainless steel mills, the price of high-grade NPI struggles to rise, while the price of high-carbon ferrochrome has already shown a pullback, weakening the cost support for stainless steel. If the subsequent production cuts fall short of expectations, stainless steel prices may continue to remain in the doldrums in the short term amid the backdrop of the consumption off-season.