News-Driven Strength in SS Futures, Improved Inquiries and Transactions for Stainless Steel Spot Cargo [SMM Stainless Steel Daily Review]

SMM September 1 - SS futures demonstrated robust upward momentum. Although the overall performance during Friday's night session appeared relatively weak, the market was impacted by news of turmoil in Indonesia, coupled with the decline in the US dollar index due to the US Fed's impending interest rate cut. SS futures surged rapidly after the morning opening, approaching the 13,000 yuan/mt threshold by the close. In the spot market, despite early reports of a major steel mill restricting coil sales, end-user acceptance of high-priced material remained limited. Against the backdrop of a sharp futures rally, spot price increases failed to keep pace with futures, though inquiries and procurement activity showed signs of recovery, with transactions being relatively active.

For futures, the most-traded 2510 contract fluctuated. At 10:30 am, SS2510 was quoted at 12,875 yuan/mt, up 45 yuan/mt from the previous trading day. In Wuxi, spot premiums/discounts for 304/2B ranged between 295-495 yuan/mt. In the spot market, Wuxi's 201/2B cold-rolled coils averaged 8,050 yuan/mt; 304/2B cold-rolled mill-edge coils averaged 13,100 yuan/mt in both Wuxi and Foshan; 316L/2B cold-rolled coils were priced at 25,675 yuan/mt in both regions; 316L/NO.1 hot-rolled coils were quoted at 25,100 yuan/mt in both locations; 430/2B cold-rolled coils were uniformly priced at 7,450 yuan/mt in Wuxi and Foshan.

Building on last week's rebound in SS futures, early this week saw further upward momentum driven by macro and news-driven tailwinds, successfully breaking through last week's resistance levels. This provided some support to market confidence. Although spot market acceptance of high-priced material remained subdued, active trade discounts and sales promotions led to slight improvements in inquiries and transactions. Notably, stainless steel social inventory has declined for eight consecutive weeks, with current levels pulling back to early-year figures, effectively alleviating steel mills' sales pressure. Additionally, recent price increases for key raw materials like nickel, chromium, and molybdenum have further elevated stainless steel's cost center. Meanwhile, rising expectations for US Fed interest rate cuts and proactive "anti-rat race" policy measures have fostered generally optimistic market sentiment. However, actual downstream demand has yet to fully recover, with September stainless steel production expected to increase further. Combined with ongoing futures volatility, the market remains susceptible to fluctuations. Therefore, close attention should be paid to the implementation of macro policies and the actual recovery progress of demand.