Stainless steel mill resumes price limits, low-priced supply decreases, and quotations become more concentrated [SMM Stainless Steel Daily Review]

SMM News on June 11: Today, the SS futures market showed signs of stopping its decline and rebounding, with prices once again testing and returning to 12,600 yuan/mt. Yesterday, some agents and traders took advantage of the low prices to build positions and purchase cargo, which, to a certain extent, alleviated the shipping pressure on stainless steel mills. This morning, stainless steel mills resumed their price-limiting operations. Despite the significant downward shift in the market's price center and the lack of obvious positive support, making it difficult for prices to rebound sharply, the resumption of price limits by steel mills, combined with the current prices being at a low level in recent years, has created resistance to further price declines. Some low-priced cargo is no longer available, and quoted prices are also becoming more concentrated.

In the futures market, the most-traded 2508 contract stopped its decline and rebounded. At 10:30 a.m., SS2508 was quoted at 12,505 yuan/mt, down 40 yuan/mt from the previous trading day. In the Wuxi region, the spot premiums/discounts for 304/2B stainless steel ranged from 465-665 yuan/mt. In the spot market, the cold-rolled 201/2B coils in both Wuxi and Foshan were quoted at 7,800 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 quoted at 24,000 yuan/mt in Wuxi and 24,000 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 quoted at 7,500 yuan/mt in both 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 shipping pressure on stainless steel mills and agents has surged, market pessimism has spread, and traders are scrambling to sell, driving stainless steel quotes continuously lower. The raw material side is also under pressure. Affected by expectations for production cuts by 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, it is feared that the current weak performance of stainless steel prices will be difficult to reverse in the short term.