SMM reported on July 17 that the SS futures market experienced a trend of initial decline followed by a rise, showing an overall upward exploration. In the spot market, in the morning, influenced by the weakening futures market, the sentiment of spot traders was slightly weak, and quotations continued the weak trend from the previous day. Subsequently, as the futures market gradually strengthened and climbed, spot quotations also increased, with inquiry enthusiasm gradually recovering. Although transactions were not significantly active, market sentiment had significantly improved, and the recent spot market had been notably influenced by the futures market. This week, stainless steel social inventory once again dropped back slightly, by 0.82%, to 982,700 mt.
In the futures market, the most-traded contract 2509 was in the doldrums. At 10:30 a.m., SS2509 was quoted at 12,640 yuan/mt, down 70 yuan/mt from the previous trading day. The spot premiums/discounts for 304/2B stainless steel in the Wuxi area ranged from 180-380 yuan/mt. In the spot market, the cold-rolled 201/2B coil was quoted at 7,650 yuan/mt in both Wuxi and Foshan; the cold-rolled mill-edge 304/2B coil had an average price of 12,750 yuan/mt in Wuxi and 12,750 yuan/mt in Foshan; the cold-rolled 316L/2B coil was priced at 23,700 yuan/mt in Wuxi and 23,700 yuan/mt in Foshan; the hot-rolled 316L/NO.1 coil was quoted at 23,200 yuan/mt in both regions; and the cold-rolled 430/2B coil was priced at 7,100 yuan/mt in both Wuxi and Foshan.
Despite the SS futures market stopping falling and rebounding and prices strengthening, the fundamentals of stainless steel spot market had not yet significantly reversed. The current market was 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 had boosted market confidence and improved the sluggish transaction situation, the inventory pressure on stainless steel remained large. The in-plant inventory, front-end warehouse inventory, and social inventory of stainless steel mills were all at relatively high levels. Under the off-season consumption, the inventory de-stocking speed was slow, delaying the repair process of the supply-demand relationship. Influenced by expectations for production cuts by stainless steel mills, the procurement price of high-grade NPI further declined, pushing down the cost support for stainless steel. In summary, the current stainless steel market faced multiple pressures of large inventory, weak demand, and weakened cost support, and the repair of the supply-demand relationship still required time.
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