Stainless steel market recovers ahead of schedule, with 304 stainless steel price rising by over 700 yuan. There are still fundamental concerns under policy drive [SMM analysis]

Recently, the stainless steel market has successfully broken free from its earlier sluggish state, showing an early trend of consumption recovery in line with the "September-October peak season". As of August 13, the price of 304 stainless steel cold-rolled trimmed coils has risen by over 700 yuan/mt compared to the near five-year low touched in June.

The reasons mainly include the following points:

1. The implementation of China's "anti-rat race" competition policies and the proposal of the "Ten Industries" stable growth plan by the Ministry of Industry and Information Technology (MIIT) have effectively restored market confidence, boosting the strength of stainless steel futures. Recently, the most-traded SS contract has approached the 13,300 yuan/mt threshold, driving the spot market to follow suit and strengthen.
2. Additionally, stainless steel production has continued to decline, with July's output down by nearly 400,000 mt from the peak in March. Coupled with stainless steel mills' recent active shipments, social inventory has fallen in tandem, significantly reducing market de-stocking pressure.
3. In terms of stainless steel furnace charge, the prices of high-grade NPI and high-carbon ferrochrome have strengthened simultaneously. High-grade NPI manufacturers are still facing inverted margins, leading to a decline in production, while traders are bullish and refusing to budge on prices. High-carbon ferrochrome prices remain high due to production halts at overseas smelters and tight domestic supply, further pushing up stainless steel costs.
4. On the international front, the US has once again extended tariffs on China. During the Stockholm talks between China and the US on July 28-29, 2025, both sides decided to extend the tariff policy by 90 days, temporarily alleviating market concerns about tariff increases.

However, it is worth noting that the implementation of domestic macro policies still requires time. In August, stainless steel planned production has risen again, and the US tariff policy has not made substantive progress, only being postponed for another 90 days. The market still faces significant uncertainties in the later period. Overall, although the stainless steel market has emerged from its earlier sluggish state driven by macro policies, market confidence has been restored, and purchase transactions have increased, it is still not completely free from the influence of the off-season. Actual downstream end-user consumption has not been effectively restored, and fundamental support is not solid. It is expected that the market will still be significantly affected by fluctuations in macro policies. Close attention should be paid to policy implementation and demand recovery in the future.