US Fed Interest Rate Cut Implementation Exhausts Positive Factors, SS Pulls Back, Inventory Continues to Decline, Stainless Steel Spot Prices Temporarily Stabilize [SMM Stainless Steel Daily Review]

SMM, September 18: SS futures continued to trade in the doldrums. The US Fed's interest rate cut was fully in line with previous market expectations, and the positive factors were exhausted. Futures generally fell after the daytime session opened, with SS futures following the downtrend and dropping below 12,900 yuan/mt in the afternoon. In the spot market, downstream players maintained a cautious wait-and-see sentiment due to the weak SS futures performance. However, stainless steel traders generally held high inventory costs, and there were good expectations for pre-holiday stockpiling demand before the National Day holiday next week, so spot prices remained stable during the day.

Futures side, the most-traded contract 2511 fell. At 10:30 a.m., SS2510 was quoted at 12,955 yuan/mt, up 45 yuan/mt from the previous trading day. In Wuxi, the spot premiums/discounts for 304/2B were in the range of 315-615 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi was 8,150 yuan/mt; the average price of cold-rolled trimmed 304/2B coil was 13,250 yuan/mt in Wuxi and 13,250 yuan/mt in Foshan; the price of cold-rolled 316L/2B coil in Wuxi was 25,750 yuan/mt and 25,750 yuan/mt in Foshan; the price of hot-rolled 316L/NO.1 coil was 25,150 yuan/mt in both locations; the price of cold-rolled 430/2B coil was 7,600 yuan/mt in both Wuxi and Foshan.

Although the market has entered the traditional consumption peak season of "September-October peak season," and the US Fed's interest rate cut landed as expected, providing room for domestic moderately loose monetary policy, market expectations for stainless steel prices this month were generally strong. Currently, social inventory of stainless steel has declined for the ninth consecutive week, with inventory levels near 900,000 mt, falling back to the beginning-of-year level, and market destocking pressure has eased somewhat. Stainless steel furnace charge nickel and chromium raw material prices remained strong, and cost support for stainless steel remained solid. However, macro tailwinds have not yet materialized, uncertainty risks still exist, and the market maintained a heavy cautious wait-and-see sentiment. Recently, SS futures also showed insufficient upward momentum. The resistance above the 13,000 yuan/mt level, which previously constrained stainless steel futures, remains, and downstream end-users have low acceptance of high-priced spot cargo, making it difficult for stainless steel spot prices to rise. Subsequent trends will depend on the pace of demand recovery and the actual realization of macro tailwinds.