Price Limit Cancelled at Stainless Steel Mill, Prices Move Downward [SMM Stainless Steel Daily Review]

SMM News on June 10: Today, the SS futures market suffered a significant setback, with futures prices plunging sharply and breaking through the critical threshold of 12,500 yuan/mt, eventually closing at 12,460 yuan/mt. The sluggish trading conditions in the spot market have led to a continuous buildup of finished product inventories at stainless steel mills, increasing the pressure to refuse to budge on prices. In the morning, news of a major steel mill canceling price limits spread rapidly, further exacerbating market pessimism. Traders' willingness to sell increased significantly, and they adopted sales promotion strategies, leading to frequent appearances of low-priced goods in the market. Despite prices reaching a cyclical low, the ongoing downward trend has intensified downstream buyers' wait-and-see sentiment, and trading conditions in the market have not seen substantial improvement.

In the futures market, the most-traded contract 2508 weakened and pulled back. At 10:30 a.m., SS2508 was quoted at 12,545 yuan/mt, down 110 yuan/mt from the previous trading day. In the Wuxi region, the spot premiums/discounts for 304/2B were in the range of 425-625 yuan/mt. In the spot market, the cold-rolled 201/2B coils in Wuxi and Foshan were both quoted at 7,850 yuan/mt; the average price of cold-rolled trimmed 304/2B coils was 12,925 yuan/mt in Wuxi and 12,925 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; and the cold-rolled 430/2B coils were both priced at 7,500 yuan/mt in Wuxi and Foshan.

Currently, the stainless steel market is mired in the traditional consumption off-season, with downstream demand remaining sluggish. Despite enterprises generally facing losses, some steel mills have implemented production cuts. However, due to the large production base in the early stage, current supply remains at a historical high, and the market is facing a prominent oversupply contradiction. The selling pressure on stainless steel mills and agents has surged. With steel mills canceling price limits, market pessimism has spread, and traders are scrambling to sell, pushing stainless steel quotes lower. The raw material side is also under pressure. Affected by expectations for production cuts at steel mills, the price increase of high-grade NPI has been hindered; the price of high-carbon ferrochrome has continued to decline, further weakening the cost support for stainless steel. If the subsequent production cut efforts fall short of expectations, against the backdrop of weak demand in the off-season, the short-term weak performance of stainless steel prices is unlikely to reverse.