The increase in stainless steel mill's list price boosts market confidence, and spot cargo quotes strengthen with inquiries [SMM Stainless Steel Daily Review]

SMM reported on August 4 that the SS futures market generally showed a strengthening and upward trend. Despite the weak and stable performance of the SS futures market from the night session on Friday to the opening of the morning session, it subsequently surged rapidly, reaching 12,900 yuan/mt again. In the spot market, most traders maintained stable prices for shipments in the morning. Subsequently, a major stainless steel mill in south China raised the guidance price for 304 stainless steel by 100 yuan/mt. Influenced by this, market sentiment strengthened significantly, with an increase in the number of inquiries and a subsequent rise in spot quotes. However, wait-and-see sentiment still persisted in the market, and actual transactions did not become significantly more active.

In the futures market, the most-traded contract 2509 strengthened and rose. At 10:30 a.m., SS2509 was quoted at 12,850 yuan/mt, down 5 yuan/mt from the previous trading day. The spot premiums and discounts for 304/2B stainless steel in Wuxi ranged from 220 to 420 yuan/mt. In the spot market, the cold-rolled 201/2B coils in Wuxi and Foshan were both quoted at 7,950 yuan/mt; the cold-rolled trimmed 304/2B coils had an average price of 13,000 yuan/mt in Wuxi and the same in Foshan; the cold-rolled 316L/2B coils were priced at 24,525 yuan/mt in Wuxi and the same in Foshan; the hot-rolled 316L/NO.1 coils were both quoted at 24,100 yuan/mt in the two cities; and the cold-rolled 430/2B coils in Wuxi and Foshan were both priced at 7,150 yuan/mt

. Recently, the stimulus effect of macro policy news has weakened somewhat. The SS futures market has repeatedly attempted to break through the 13,000 yuan/mt threshold but has failed to hold steady. Due to the limited increase in spot prices in the early stage, despite the slight pullback in futures, spot quotes have not been significantly affected, remaining basically stable. However, current market confidence is recovering, transaction volumes are picking up, inventory pressure at stainless steel mills has eased, and the degree of inversion has also improved. Against this backdrop, the actual production cuts in July were less than expected at the beginning of the month, and it is anticipated that production in August may rebound to 3.3 million mt. Nevertheless, the recent market recovery has been mainly driven by strong macro news, and the actual recovery in fundamentals has not been significant, with considerable uncertainty remaining in the market. The Sino-US tariff negotiations have not made substantive progress, only extending the buffer period by another 90 days. The implementation of domestic infrastructure and "anti-rat race" competition policies still requires time, and close attention should be paid to the further rollout of policies and the recovery of downstream demand in the future