Stainless steel consumption remains sluggish, with prices in the doldrums [SMM Stainless Steel Daily Review]

SMM News on June 18: Today, although the SS futures market briefly held up well after the opening of the daytime session, it remained in a state of fluctuation at lows overall. Trading in the spot market continued to be sluggish, with traders generally lacking confidence in the future market. Some holders, under pressure to sell, occasionally offered low prices for certain specifications. Downstream buyers maintained a cautious wait-and-see attitude, focusing on restocking based on minimal immediate needs. Recently, prices of high-grade NPI and high-carbon ferrochrome have continued to decline, weakening the cost support for stainless steel. The market as a whole continues to be in the doldrums.

In the futures market, the most-traded 2508 contract weakened and declined. At 10:30 a.m., SS2508 was quoted at 12,490 yuan/mt, down 10 yuan/mt from the previous trading day. In the Wuxi region, spot premiums/discounts for 304/2B ranged from 380 to 680 yuan/mt. In the spot market, cold-rolled 201/2B coils in both Wuxi and Foshan were quoted at 7,750 yuan/mt; cold-rolled trimmed 304/2B coils had an average price of 12,850 yuan/mt in Wuxi and the same in Foshan; cold-rolled 316L/2B coils were priced at 24,000 yuan/mt in Wuxi and the same in Foshan; hot-rolled 316L/NO.1 coils were quoted at 23,350 yuan/mt in both regions; cold-rolled 430/2B coils were priced 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 historically high level for the same period, exacerbating the oversupply situation in the market. Stainless steel mills and agents are facing increasing pressure to sell, and market pessimism is spreading. Traders are competing 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 continues to decline, further weakening the cost support for stainless steel. If the subsequent production cuts are not as strong as expected, against the backdrop of weak demand in the off-season, it is likely that the weak performance of stainless steel prices in the short term will be difficult to reverse.