Stainless Steel Market Remains Sluggish in First Week After Dragon Boat Festival, Inventory Rises [SMM Analysis]

SMM, June 5: This week (May 30-June 5, 2025), the total inventory in Wuxi and Foshan's two major stainless steel markets showed a significant inventory buildup, rising from 967,500 mt on May 29, 2025, to 983,300 mt on June 5, up 1.63% WoW. Affected by weak consumption, the social inventory of stainless steel increased.

In the first week after the Dragon Boat Festival holiday, the stainless steel market continued to exhibit weakness. During the holiday, despite the stagnation of trading activities, some warehouses continued to purchase goods, leading to further inventory accumulation. After entering the traditional consumption off-season in June, market transactions remained sluggish, continuing the previous downturn. Earlier, the active trading of low-priced warrant cargoes formed through futures market arbitrage provided some support for market consumption. However, with the recent continuous fluctuation at lows of stainless steel futures and spot prices, the arbitrage space narrowed, and the boosting effect of such low-priced cargoes on transactions significantly weakened. Although stainless steel mills have implemented production cuts, amid the substantial contraction in demand during the consumption off-season, the market's supply surplus situation remains unchanged. Looking ahead to the short-term market, due to the continued weakness in the consumption side, even with production cuts by stainless steel enterprises, overall production remains high, posing significant resistance to the restoration of market confidence. Under these circumstances, it is expected that the inventory pressure on stainless steel will be difficult to alleviate in the short term, and the supply-demand imbalance in the market will persist.

200-series: In Wuxi, the inventory of 200-series stainless steel increased from 95,700 mt to 97,100 mt, up 1.46%; in Foshan, it increased from 162,700 mt to 164,000 mt, up 0.8%. 300-series: In Wuxi, the inventory of 300-series stainless steel increased from 348,400 mt to 359,000 mt, up 3.04%; in Foshan, it decreased from 221,300 mt to 220,000 mt, down 0.59%. 400-series: In Wuxi, the inventory of 400-series stainless steel increased from 82,600 mt to 84,200 mt, up 1.94%; in Foshan, it increased from 56,800 mt to 59,000 mt, up 3.87%.