Typhoon "Bualoi" Affects Foshan, Stainless Steel Trading Suspended, Insufficient Market Confidence, Prices Remain Stable and Difficult to Rise [SMM Stainless Steel Daily Report]

SMM, September 24: SS futures were in the doldrums. SS repeated yesterday's trend, remaining relatively strong during the night session but weakening quickly after the daytime session opened, eventually closing down at 12,895 yuan/mt. On the spot market, pre-holiday demand for the National Day holiday did not materialize, futures were in the doldrums, and high-grade NPI prices showed signs of loosening, leading to weak market confidence and mediocre intraday transactions. In Foshan, cargo pick-up was suspended due to Typhoon Mujigae, with most industry participants on home leave.

Futures side, the most-traded contract SS2511 traded in the doldrums. At 10:30 am, SS2511 was quoted at 12,905 yuan/mt, up 20 yuan/mt from the previous trading day. In Wuxi, spot premiums/discounts for 304/2B were in the range of 315-615 yuan/mt. On the spot market, the average price for cold-rolled 201/2B coil in Wuxi was 8,050 yuan/mt; for cold-rolled mill-edge 304/2B coil, the average price in Wuxi was 13,200 yuan/mt, and in Foshan 13,200 yuan/mt; for cold-rolled 316L/2B coil, the price in Wuxi was 25,650 yuan/mt, and in Foshan 25,650 yuan/mt; for hot-rolled 316L/NO.1 coil, both regions reported 24,950 yuan/mt; for cold-rolled 430/2B coil, both Wuxi and Foshan reported 7,600 yuan/mt.

Despite the traditional September-October peak season, end-use demand for stainless steel did recover compared to earlier periods, but as stainless steel mill production increased simultaneously during 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 the peak season. Although inventory gradually declined, stainless steel spot prices struggled to rise. This week, the US Fed cut interest rates by 25 basis points, in line with previous 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, futures turned downward. Downstream acceptance of high prices in the spot market was already low, and the pullback in futures prices further intensified wait-and-see sentiment. In addition, further increases in the prices of nickel and chromium raw materials on the cost side also encountered resistance. Although, in the short term, influenced by the traditional peak season, low social inventory, and pre-holiday stockpiling demand ahead of the National Day holiday, stainless steel prices are unlikely to see significant declines, the momentum for further increases has clearly weakened.