Weak stainless steel transactions continue, with prices hovering at low levels [SMM Stainless Steel Daily Review]

SMM News on June 16: Today, the SS futures market continued its weak trend, oscillating within the range of 12,600-12,500 yuan/mt. Stainless steel spot quotes remained stable overall, but traders generally reported persistently sluggish transaction volumes. With the arrival of the consumption off-season, despite stainless steel prices falling to relatively low levels, downstream customers remained cautious and took a wait-and-see approach amid a backdrop of loose supply, primarily making just-in-time procurement, making it difficult for prices to rebound significantly. In the afternoon today, Tsingshan lowered its 201 series prices, with a general decrease of 70-100 yuan/mt, aiming to boost transactions.

In the futures market, the most-traded 2508 contract oscillated. At 10:30 AM, SS2508 was quoted at 12,560 yuan/mt, up 20 yuan/mt from the previous trading day. In the Wuxi region, the spot premiums/discounts for 304/2B were in the range of 360-610 yuan/mt. In the spot market, the cold-rolled 201/2B coils in both Wuxi and Foshan were quoted at 7,750 yuan/mt; the cold-rolled trimmed 304/2B coils had an average price of 12,875 yuan/mt in Wuxi and the same in Foshan; the cold-rolled 316L/2B coils were quoted at 24,000 yuan/mt in Wuxi and the same 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 persistently weak downstream demand. 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 historically high level for the same period, highlighting the prominent oversupply contradiction in the market. Stainless steel mills and agents are facing increasing pressure to sell, with market pessimism spreading. Traders are competing to sell, driving stainless steel quotes lower. The raw material side is also under pressure, with high-grade NPI prices facing resistance to rise due to expectations for production cuts at steel mills; high-carbon ferrochrome prices continue 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 trend in stainless steel prices is likely to persist.