Stainless Steel Demand Sluggish Before Holiday, Spot and Futures Prices Decline in Sync [SMM Stainless Steel Daily Report]

SMM September 29 - SS futures showed a clear pullback trend. Today, metal futures generally declined, and SS followed suit, with the intraday low falling below 12,750 yuan/mt. In the spot market, driven by the decline in futures and recent softening in nickel-based raw material prices, stainless steel market confidence was insufficient. Additionally, as the National Day holiday approaches, most pre-holiday stockpiling has been completed, leading to strong wait-and-see sentiment and sluggish transactions. Some traders are currently mainly busy with shipments for previous orders.

Futures side, the most-traded contract 2511 pulled back. At 10:30 am, SS2511 was quoted at 12,795 yuan/mt, down 45 yuan/mt from the previous trading day. In Wuxi, the spot premium/discount for 304/2B was in the range of 325-625 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was 8,100 yuan/mt; the average price for cold-rolled mill edge 304/2B coil was 13,100 yuan/mt in Wuxi and 13,100 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 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 peak consumption season of "September-October peak season," downstream end-use demand recovery has been limited, and market purchasing sentiment remains sluggish. As the National Day holiday approaches, pre-holiday stockpiling demand has not materialized, leading to mediocre transactions. The 11-week destocking process for stainless steel social inventory has ended, and social inventory has increased. Although some stainless steel mills were affected by production line ultra-low emission upgrades and maintenance, reducing production, overall stainless steel planned production remains at a relatively high level, and supply is generally loose. Coupled with the exhaustion of short-term macro policy benefits, SS futures have been in the doldrums throughout the week, with weak 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, ferrochrome retail 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, while increased, remains at low levels, and stainless steel mills still face losses, short-term stainless steel prices are unlikely to see a significant pullback.