In September, the Peak Season's Macro Tailwinds Supported Stable Stainless Steel Prices; Slow Demand Recovery and Market Caution Made It Difficult to Break Through the Upward Resistance [SMM Stainless Steel Daily Report]

SMM September 12, SS futures showed a strengthening and upward trend. Overnight, US Labor Department data showed that initial jobless claims this week hit a new high since 2021, and weakness in the job market further fueled expectations for a US Fed interest rate cut in September. Against this macro tailwinds backdrop, SS futures strengthened, but limited by weak spot market transactions, they still failed to break through the 13,000 yuan/mt level . On the spot market side, SS futures encountered resistance at the 13,000 yuan/mt level and struggled to rise, stainless steel spot prices remained largely stable this week . Downstream market caution and wait-and-see sentiment intensified again, inquiries weakened, with just-in-time procurement dominating, and traders reported relatively sluggish transactions this week . However, with the arrival of the peak consumption season, downstream demand gradually recovered, just-in-time stockpiling increased, and stainless steel social inventory further declined , especially with tight supply of 304 HRC coils. Expectations for a US Fed interest rate cut are approaching, and the stainless steel cost side remains strong, providing bullish confidence for the stainless steel market. But macro policies have not yet been implemented, and the downstream recovery process is slow, these factors together constrain the stainless steel market's strengthening trend during the peak season .

Futures side, the most-traded contract 2511 held up well. At 10:30 am, SS2510 was quoted at 12,960 yuan/mt, up 65 yuan/mt from the previous trading day. Wuxi 304/2B spot premiums/discounts were in the range of 260-560 yuan/mt. In the spot market, Wuxi cold-rolled 201/2B coils averaged 8,100 yuan/mt; cold-rolled mill-edge 304/2B coils averaged 13,200 yuan/mt in Wuxi and 13,200 yuan/mt in Foshan; cold-rolled 316L/2B coils were 25,825 yuan/mt in Wuxi and 25,825 yuan/mt in Foshan; hot-rolled 316L/NO.1 coils were quoted at 25,250 yuan/mt in both locations; cold-rolled 430/2B coils were 7,600 yuan/mt in both Wuxi and Foshan.

Although the market has entered the traditional September-October peak consumption season, and expectations for a US Fed interest rate cut are gradually approaching, providing room for domestic moderately accommodative monetary policy, market expectations for stainless steel prices this month are generally strong . Currently, stainless steel social inventory has declined for the ninth consecutive week, with inventory levels near 900,000 mt, pulling back to early-year levels, and market destocking pressure has eased somewhat . Stainless steel furnace charge nickel and chromium raw material prices remain strong, stainless steel cost support remains solid . However, macro tailwinds have not yet materialized, uncertainty risks still exist, and the market maintains a heavy cautious wait-and-see sentiment . Recently, SS futures also showed insufficient upward momentum, and the previous 13,000 yuan/mt resistance level for stainless steel futures remained unbroken. Downstream end-users showed low acceptance of high-priced spot cargo, making it difficult for stainless steel spot prices to rise. The subsequent trend will depend on the pace of demand recovery and the actual realization of macro tailwinds.