SS futures continue to strengthen and rise, while demand for stainless steel spot cargo remains weak [SMM Stainless Steel Futures Weekly Review]

According to SMM data, the most-traded SS contract showed a strengthening and upward trend this week. As of 10:30 on July 11, the SS2508 contract was quoted at 12,755 yuan/mt, up 5 yuan/mt WoW.

From a macro perspective, Trump announced that he would implement a unilateral tariff policy starting August 1, with tariffs possibly reaching as high as 60%-70%, primarily targeting Chinese goods, including steel home appliances. This move has heightened concerns in the export market and indirectly dampened expectations for stainless steel demand. In the US, the Producer Price Index (PPI) for June increased by 1.7% YoY, and ADP employment figures unexpectedly decreased by 33,000, marking the first negative growth since March 2023. This has further strengthened market expectations for an interest rate cut in September, leading to a weakening of the US dollar and boosting commodity prices. The sixth meeting of the Central Financial and Economic Affairs Commission clearly stated that it would address "low-price and disorderly competition," and the revision of the Anti-Unfair Competition Law would include "rat race" competition dumping within the scope of legal regulation, accelerating the exit of inefficient capacity and boosting market sentiment. However, its effectiveness still requires time to be verified.

On the fundamental side, social inventory of stainless steel rose again this week, with transaction volumes still dominated by low-priced goods offered by traders at a discount. Overall trading activity remained sluggish. Despite significant fluctuations in futures prices in the current market, the actual transaction prices of spot cargo have remained largely stable. Actual market transactions have maintained their previous levels, with end-use demand continuing to be dominated by just-in-time procurement, and market confidence remaining weak. The repair of the market supply-demand relationship still requires some time.