Futures generally rose, boosting SS prices upward. The fundamental weakness of stainless steel spot prices remains unchanged amid the off-season for consumption [SMM Stainless Steel Daily Review]

SMM reported on July 10 that the SS futures market continued to rise strongly today, driven by the general increase in the overall futures market, approaching the 12,900 yuan/mt threshold before the close. In the spot market, operations remained stable in the morning, with quotes continuing the previous levels and no significant fluctuations in transactions. In the afternoon, as the futures market continued to strengthen, traders' enthusiasm for restocking increased significantly, market inquiry activity rose, and quotes also increased slightly. This week, stainless steel social inventory climbed again, up 1.31% WoW, reaching 990,800 mt, with significant pressure on market shipments and transactions.

In the futures market, the most-traded 2508 contract strengthened and rose. At 10:30 a.m., SS2508 was quoted at 12,825 yuan/mt, up 80 yuan/mt from the previous trading day. The spot premiums/discounts for 304/2B in Wuxi were in the range of -55 to 145 yuan/mt. In the spot market, cold-rolled 201/2B coils in Wuxi and Foshan were both quoted at 7,500 yuan/mt; cold-rolled trimmed 304/2B coils had an average price of 12,700 yuan/mt in Wuxi and 12,700 yuan/mt in Foshan; cold-rolled 316L/2B coils were priced at 23,700 yuan/mt in Wuxi and 23,700 yuan/mt in Foshan; hot-rolled 316L/NO.1 coils were quoted at 23,150 yuan/mt in both Wuxi and Foshan; cold-rolled 430/2B coils were both priced at 7,100 yuan/mt in Wuxi and Foshan

. Despite the stop falling and rebound in the SS futures market and the strengthening of prices, the spot fundamentals of stainless steel have not yet shown a significant reversal. The current market is still in the traditional consumption off-season, with summer high temperatures further weakening some downstream demand. Although the previous news of production cuts by steel mills boosted market confidence and improved the sluggish transaction situation, the inventory pressure on stainless steel remains significant. In-plant inventory, front-end warehouse inventory, and social inventory of stainless steel mills are all at relatively high levels, and the slow pace of inventory reduction during the consumption off-season has delayed the repair process of the supply-demand relationship. Affected by expectations for production cuts by stainless steel mills, the procurement price of high-grade NPI has further declined, driving the weakening of cost support for stainless steel. In summary, the current stainless steel market is facing multiple pressures of large inventory, weak demand, and weakened cost support, and the repair of the supply-demand relationship still requires time.