Macro leads SS futures to stop falling and rebound, with stainless steel spot prices also rising in tandem [SMM Stainless Steel Daily Review]

On August 25, SMM reported that the SS futures showed a trend of stopping falling and rebounding. Affected by expectations for a dovish US Fed, the futures market strengthened overall, and the SS futures were driven to fluctuate upward throughout the day, with the high point once breaking through the 12,900 yuan/mt mark. In the spot market, driven by the rebound in the futures market, the bullish sentiment in the spot market recovered, and traders' quotations strengthened again. Under the influence of strong expectations, inquiries were good during the day, and the transaction volume also showed a WoW increase.

In the futures market, the most-traded 2510 contract fluctuated upward. At 10:30 AM, SS2510 was quoted at 12,830 yuan/mt, up 85 yuan/mt from the previous trading day. The spot premiums/discounts for 304/2B in Wuxi ranged from 340-490 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi was reported at 8,050 yuan/mt; cold-rolled 304/2B coils with trimmed edges had an average price of 13,075 yuan/mt in Wuxi and 13,050 yuan/mt in Foshan; cold-rolled 316L/2B coils were priced at 25,625 yuan/mt in Wuxi and the same in Foshan; hot-rolled 316L/NO.1 coils were quoted at 24,950 yuan/mt in both regions; cold-rolled 430/2B coils were priced at 7,400 yuan/mt in both Wuxi and Foshan.

Last week, the SS futures market continued to decline, fully erasing the gains made during the month and basically pulling back to the level seen at month-end July, with the low point even falling to the critical mark of 12,700 yuan/mt. Affected by this, the spot market also weakened simultaneously. The downstream market had low acceptance of the previously high prices, coupled with a significant correction in the futures market and traders adopting price-cutting measures under selling pressure, leading to a pullback in spot quotations. However, even with the price reductions, the transaction volume failed to improve effectively, as the market generally exhibited a "rush to buy amid continuous price rise and hold back amid price downturn" mentality, resulting in a stronger wait-and-see sentiment among downstream players and a further deterioration in transaction conditions. However, with the traditional peak consumption season of the "September-October peak season" gradually approaching and stainless steel mills implementing slight production cuts, the actual production schedule may fall slightly short of expectations. Recently, the social inventory of stainless steel has declined for seven consecutive weeks. Coupled with increases in the prices of raw materials such as nickel and chromium, as well as heightened expectations for US Fed interest rate cuts and the boost from the national "anti-rat race" competition policy, this week, stainless steel prices have stopped falling and rebounded.