Stainless Steel Underperforming Peak Season Situation Difficult to Change, Destocking Ends and Inventory Accumulates [SMM Stainless Steel Daily Report]

SMM September 25 news, SS futures held up well. The overall intraday trend was strong, but the rise was relatively limited, with prices mostly staying above 12,900 yuan/mt. Spot market side, influenced by the firm performance of SS futures, market sentiment recovered somewhat, and some traders raised their offers. However, actual transactions remained mediocre, mainly concentrated in low-priced cargo. With the passing of Typhoon Hagibis, the Foshan area gradually returned to normal today. This week, social inventory ended an 11-week destocking trend, increasing WoW by 1.32% to 909,000 mt.

Futures side, the most-traded contract 2511 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 the Wuxi area, the spot premium/discount for 304/2B was in the range of 315-615 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was reported at 8,050 yuan/mt; the average price for cold-rolled mill edge 304/2B coil was 13,200 yuan/mt in Wuxi and 13,200 yuan/mt in Foshan; the price for cold-rolled 316L/2B coil was 25,650 yuan/mt in Wuxi and 25,650 yuan/mt in Foshan; the price for hot-rolled 316L/NO.1 coil was reported at 24,950 yuan/mt in both locations; the price for cold-rolled 430/2B coil was 7,600 yuan/mt in both Wuxi and Foshan.

Despite the traditional September-October peak season, end-use demand for stainless steel did recover compared to earlier periods. However, 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 prior market expectations. SS futures had already struggled to break through the previous bottleneck of 13,000 yuan/mt; after the short-term macro tailwinds materialized, the futures trend turned downward. Downstream acceptance of high prices in the spot market was already low, and the pullback in futures prices further intensified the wait-and-see sentiment. Additionally, 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 is clearly insufficient at present.