September Stainless Steel Production Rose 3.02% MoM, "September Peak Season" Demand Recovery Shows Weakness, October Production Increases Face Constraints [SMM Analysis]

SMM data shows that national stainless steel production in September 2025 increased by 3.02% MoM and 5.79% YoY. By series, 200 series production rose 10.51% MoM; 300 series production increased 0.45% MoM; 400 series production fell 0.84% MoM.

In September, overall stainless steel production continued to climb, but was slightly lower than initial expectations, with a relatively limited increase. As the traditional September-October peak season officially began, despite widespread pessimism among market traders, actual demand showed significant recovery compared to earlier periods. Mid-month, social inventory of stainless steel achieved 11 consecutive weeks of destocking, with inventory levels pulling back to those seen at the beginning of the year. Additionally, the US Fed completed its first 20-basis-point interest rate cut within the month, providing some tailwinds for commodity prices, which fostered a relatively optimistic market sentiment in early to mid-September. Meanwhile, for most of the month, stainless steel mills maintained some profitability, keeping production enthusiasm at a relatively high level. Although production at some mills was affected by factors such as maintenance and environmental protection, overall output still showed an upward trend.

Looking ahead to October, stainless steel production is expected to increase slightly. The traditional September-October peak season is currently underway, and with low stainless steel inventory levels, stainless steel mills face relatively little pressure in terms of sales and funding, allowing overall production to remain at previous levels. Furthermore, mills affected by maintenance and equipment upgrades have completed adjustments and resumed normal production, which is expected to contribute to an overall increase in output. However, downstream demand for stainless steel remains limited and has not shown the robust activity typical of the peak season. Combined with the fact that short-term macro tailwinds have largely been released, SS futures are trending downward, wait-and-see sentiment is intensifying, and spot prices are declining, leading to renewed cost-profit inversion for stainless steel mills. This, to some extent, impacts mills' production enthusiasm, making it difficult for stainless steel output to achieve significant growth. Future attention should focus on further recovery in downstream demand and the continued release of macro tailwinds.