US Fed Interest Rate Cut Realized, Short-Term Positive Factors Exhausted, SS Futures Retreat After Rapid Rise, Stainless Steel Returns to Fundamentals [SMM Stainless Steel Futures Weekly Review]

SMM data showed the most-traded SS futures contract retreated after a rapid rise this week. As of 10:30 on September 19, the SS2511 contract was quoted at 12,870 yuan/mt, down 90 yuan/mt WoW.

From a macro perspective, the US Fed announced a 25-basis-point interest rate cut as scheduled in the early hours of September 18. The move itself was in line with market expectations, but its impact exhibited a "buy the rumor, sell the fact" characteristic. The key was Fed Chairman Powell's hawkish stance after the meeting, as he emphasized that "there is no need to adjust interest rates quickly," which dashed market optimism for the start of a continuous interest rate cut cycle. This led to a rebound in the US dollar index, put global commodity prices under pressure, and caused stainless steel futures to decline accordingly.

From a fundamental analysis, despite the current traditional consumption peak season of September-October, end-use demand for stainless steel has indeed recovered compared to the previous period. However, due to a simultaneous increase in stainless steel production from steel mills within the month, the stainless steel market did not show a significant strengthening trend. Market participants generally felt the overall atmosphere was sluggish, and the market did not exhibit the vibrant trading scene typical of a peak season. Although inventory gradually declined, stainless steel spot prices struggled to rise. This week, the US Fed's interest rate cut was officially implemented, with a 25-basis-point reduction, consistent with prior market expectations. SS futures had already struggled to break through the previous bottleneck of 13,000 yuan/mt, and after short-term macro tailwinds were realized, the futures trend turned downward. Downstream acceptance of high prices in the spot market was already low, and the decline in futures prices further intensified wait-and-see sentiment. In addition, cost side, further increases in nickel and chromium raw material prices encountered resistance. Although stainless steel prices are unlikely to see significant declines in the short term due to the traditional peak season, low social inventory, and pre-holiday stockpiling demand ahead of the National Day holiday, the momentum for further increases has clearly weakened.