Post-Holiday SS Futures Strengthen, Spot Trading Slightly Sluggish, Spot Prices Temporarily Stable [SMM Stainless Steel Daily Report]

SMM October 9 news, SS futures showed a trend of falling first and then rising. On the first trading day after the holiday, although LME nickel rose sharply during the holiday, SS futures opened lower, dragged down by the pullback in ferrous metals series. In the afternoon, driven by the strength of SHFE nickel and the overall ferrous metals series turning positive, SS futures followed the upward trend, once approaching 12,900 yuan/mt. In the spot market, on the first day after the holiday, industry participants gradually resumed work, but the spot market continued the sluggish situation seen before the holiday, with downstream end-users maintaining a cautious wait-and-see attitude toward purchases. In addition, in the morning, SS futures were affected by the weakness in ferrous metals series and declined slightly. Morning spot quotations were basically flat compared to pre-holiday levels. In the afternoon, as SHFE nickel futures continued to strengthen, driving SS futures higher, afternoon quotations rose slightly, but downstream acceptance of high prices remained limited.

In the futures market, the most-traded contract SS2511 strengthened and tested higher levels. At 10:30 a.m., SS2511 was quoted at 12,780 yuan/mt, up 25 yuan/mt from the previous trading day. In the Wuxi spot market, the premium/discount for 304/2B was in the range of 340-640 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 edged 304/2B coil, the average price in Wuxi was 13,100 yuan/mt, and in Foshan was 13,100 yuan/mt; for cold-rolled 316L/2B coil in Wuxi, the price was 25,650 yuan/mt, and in Foshan was 25,650 yuan/mt; for hot-rolled 316L/NO.1 coil, the price in both locations was 24,950 yuan/mt; for cold-rolled 430/2B coil, the price in both Wuxi and Foshan was 7,600 yuan/mt.

Although it is currently the traditional peak consumption season of "September-October peak season," the recovery in downstream end-use demand is relatively limited, and market purchasing sentiment remains sluggish. Approaching the National Day holiday, pre-holiday stockpiling demand failed to materialize, leading to mediocre transactions. The 11-week consecutive destocking process for stainless steel social inventory ended, and social inventory increased. Although some stainless steel mills were affected by production line ultra-low emission upgrades and maintenance, reducing production, the overall stainless steel production schedule 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 fluctuating trend during the week, with insufficient market confidence. Furthermore, on the raw material side, although Tsingshan raised the October steel mill tender price for high-carbon ferrochrome, it was in line 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 showed some softening during the week, and the cost support for stainless steel weakened somewhat. Although current market sentiment is weak, given that it is still the traditional peak season, and although inventory has increased it remains at low levels, and stainless steel mills still face losses, stainless steel prices are unlikely to see a significant pullback in the short term.