"September-October Peak Season" Demand Fails to Boost Stainless Steel Inventory Accumulation, Cost Support Weakens [SMM Stainless Steel Daily Report]

SMM September 26 - SS futures showed a weakening and pullback trend. Influenced by the overall decline in the ferrous metals series, SS futures followed the downtrend, with intraday prices approaching 12,800 yuan/mt and finally closing at 12,840 yuan/mt. In the spot market, the continued weak performance of SS futures further dampened market purchasing sentiment, extending the recent underperforming peak season. This week, stainless steel social inventory ended the previous 11-week destocking trend and shifted to inventory buildup. Meanwhile, NPI prices also softened, leading to generally weak market expectations for the future and further intensifying cautious wait-and-see sentiment. Pre-holiday procurement demand for the National Day holiday did not materialize as expected.

Futures side, the most-traded contract 2511 traded in the doldrums. At 10:30 a.m., SS2511 was quoted at 12,840 yuan/mt, down 105 yuan/mt from the previous trading day. In Wuxi, spot premiums/discounts for 304/2B were in the range of 330-630 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was 8,100 yuan/mt; for cold-rolled mill-edge 304/2B coil, the average price in Wuxi was 13,150 yuan/mt, and in Foshan, 13,150 yuan/mt; for cold-rolled 316L/2B coil in Wuxi, 25,650 yuan/mt, and in Foshan, 25,650 yuan/mt; for hot-rolled 316L/NO.1 coil, both locations reported 24,950 yuan/mt; for cold-rolled 430/2B coil, both Wuxi and Foshan reported 7,600 yuan/mt.

Despite the traditional consumption peak season of "September-October peak season," downstream end-use demand recovery has been relatively limited, and market purchasing sentiment remains sluggish. Approaching the National Day holiday, pre-holiday stockpiling demand failed to materialize, leading to mediocre trading volume during the week. The 11-week consecutive destocking process for stainless steel social inventory ended, with social inventory increasing during the week. Although some stainless steel mills experienced production reductions due to ultra-low emission upgrades and maintenance, overall stainless steel planned production remains at a relatively high level, and supply is generally loose. Additionally, with short-term macro policy benefits exhausted, SS futures overall showed a weak and volatile trend during the week, with insufficient market confidence. On the raw material side, although Tsingshan raised the October steel mill tender price for high-carbon ferrochrome, consistent with prior market expectations, retail ferrochrome prices have already reached a considerable level, and the previous strengthening and bullish trend has ended, with overall prices largely stable. High-grade NPI prices softened during the week, weakening cost support for stainless steel. Although current market sentiment is weak, given that it is still the traditional peak season and inventory, though increased, remains at low levels, and stainless steel mills still face losses, short-term stainless steel prices are unlikely to see a significant pullback.