Consumption driven by end-use demand in the downstream sector remains weak, with social inventory of stainless steel approaching 1 million mt again [SMM Analysis]

SMM reported on June 12 that during this week (June 6-12, 2025), the total inventory at the two major stainless steel markets in Wuxi and Foshan continued to experience inventory buildup, rising from 983,300 mt on June 5, 2025, to 998,800 mt on June 12, up 1.58% WoW. The consumption driven by end-use demand in the downstream sector remained sluggish, pushing social inventory of stainless steel close to 1 million mt again.

Recently, transactions in the stainless steel market have remained weak. Downstream end-users have adopted a cautious approach to purchasing, primarily focusing on just-in-time procurement. Despite a decline in stainless steel production, it has still remained at a relatively high level. Affected by the price-limiting strategy, agents and traders of steel mills have faced difficulties in sales and destocking. Steel mills have encountered significant resistance in distributing goods downstream, leading to a continuous accumulation of inventory at stainless steel mills. There have even been reports of inventory overflow at stainless steel mills. During the week, a major stainless steel mill temporarily lifted its price-limiting strategy due to sales pressure, causing stainless steel prices to plummet and hit a recent low. Downstream traders took the opportunity to replenish inventory at lower prices, alleviating some of the inventory pressure on steel mills, but this led to an accumulation of social inventory. Currently, with stainless steel production remaining high, the short-term enthusiasm for sporadic purchases driven by low prices is unlikely to be sustained. The market has clearly entered a state of supply surplus. If no further production cut strategies are adopted, stainless steel inventory will still face significant destocking pressure.

200-series: In Wuxi, inventory of the 200-series increased from 97,100 mt to 98,900 mt, up 1.85%; in Foshan, it rose from 164,000 mt to 164,100 mt, up 0.6%. 300-series: In Wuxi, inventory of the 300-series increased from 359,000 mt to 367,800 mt, up 2.45%; in Foshan, it rose from 220,000 mt to 224,400 mt, up 2%. 400-series: In Wuxi, inventory of the 400-series decreased from 84,200 mt to 84,100 mt, down 0.12%; in Foshan, it increased from 59,000 mt to 59,500 mt, up 0.85%.