The increase in spot stainless steel prices lags behind that of futures, and it will still take some time for the market supply and demand to recover [SMM Stainless Steel Daily Review]

Published: Jul 4, 2025 17:15

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[SMM Stainless Steel Daily Review: Stainless Steel Spot Gains Lag Behind Futures, Market Supply and Demand Recovery Still Takes Time] SMM reported on July 4 that the SS futures market opened higher and moved downwards today, with the intraday high once approaching the 12,800 yuan/mt mark. In the spot market, spot prices remained generally stable this week, with a narrower range of fluctuations compared to the futures market. However, market sentiment was significantly influenced by the futures market's trend, with transaction volumes fluctuating in line with futures market changes. Early in the week, influenced by the decline in the futures market, the strength of stainless steel prices brought about by previous steel mill production cuts was hindered, resulting in a slight correction in prices and a significant decrease in transactions. However, subsequent to this, inquiries and transactions became active again, driven by the futures market. With consumption recovering and supply pressure easing due to steel mill production cuts, social inventory of stainless steel further decreased this week, down 1.42% WoW to 978,000 mt. In the futures market, the most-traded contract 2508 opened higher and moved downwards. At 10:30 a.m., SS2508 was quoted at 12,750 yuan/mt, up 75 yuan/mt from the previous trading day. In the Wuxi region, the spot premiums/discounts for 304/2B stainless steel ranged from 75-220 yuan/mt. In the spot market, cold-rolled 201/2B coils in Wuxi and Foshan were both quoted at 7,600 yuan/mt; cold-rolled trimmed 304/2B coils had an average price of 12,725 yuan/mt in Wuxi and 12,725 yuan/mt in Foshan; cold-rolled 316L/2B coils were priced at 23,800 yuan/mt in Wuxi and 23,800 yuan/mt in Foshan; hot-rolled 316L/NO.1 coils were quoted at 23,100 yuan/mt in both Wuxi and Foshan; cold-...

SMM July 4, the most-traded SS futures contract moved downwards after a higher opening today, with intraday highs approaching the 12,800 yuan/mt threshold. Spot market side, spot prices remained generally stable this week, with narrower fluctuations compared to the futures market. However, market sentiment was visibly influenced by futures movements, with trading activity fluctuating alongside price changes. Early in the week, stainless steel prices faced resistance from the earlier steel mill production cuts news as futures declined, leading to a slight correction and significantly weaker transactions. However, inquiries and deals regained momentum later, driven by futures performance. With recovering consumption and reduced supply pressure from mill output cuts, social inventory of stainless steel further decreased this week, down 1.42% WoW to 978,000 mt.

Futures side, the most-traded SS2508 contract moved downwards after a higher opening. At 10:30 am, SS2508 traded at 12,750 yuan/mt, up 75 yuan/mt from the previous session. In Wuxi, spot premiums/discounts for 304/2B ranged between 75-220 yuan/mt. In spot markets, cold-rolled 201/2B coils in Wuxi and Foshan both quoted at 7,600 yuan/mt; cold-rolled edge-trimmed 304/2B coils averaged 12,725 yuan/mt in both cities; cold-rolled 316L/2B coils in Wuxi and Foshan traded at 23,800 yuan/mt; hot-rolled 316L/NO.1 coils quoted at 23,100 yuan/mt in both locations; cold-rolled 430/2B coils in Wuxi and Foshan both stood at 7,200 yuan/mt.

Currently, despite declining social inventory, recovering market confidence, and improved transaction weakness, stainless steel remains in the traditional consumption off-season without significant end-use demand recovery. Trading still faces substantial influence from futures and news flow, with low market acceptance for high-priced material keeping spot prices at relatively low levels. Although social inventory pulled back slightly over the past two weeks, overall levels remain elevated, with steel mills' in-plant inventories and forward warehouses still facing considerable destocking pressure, slowing the supply-demand relationship recovery. Additionally, under current expectations for production cuts at stainless steel mills, demand for high-grade NPI has declined, keeping nickel pig iron prices at low levels and weakening cost support for stainless steel.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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