SMM October 17 - SS futures showed a relatively strong and rangebound fluctuation. Boosted by the strength in SHFE nickel, SS futures recovered from previous lows and traded rangebound around 12,610 yuan/mt during the day. In the spot market, spot stainless steel prices strengthened in the afternoon yesterday, driven by the rise in SS futures. Today's quotes largely continued yesterday afternoon's levels, with SS futures showing some recovery. Meanwhile, as prices have reached relatively low levels, market sentiment gradually recovered. This week, amid intensified China-US trade friction and SS futures hitting bottom, market confidence remained generally weak, with sluggish transactions. Additionally, prices of both high-grade NPI and high-carbon ferrochrome fell, leading to a loosening of cost support for stainless steel, and spot prices declined more than expected. Social inventory increased significantly this week, up 5.19% WoW to 952,600 mt. However, current prices are approaching relatively low levels, and stainless steel costs are already in an inverted state. Coupled with market expectations for the US Fed to cut interest rates and halt balance sheet reduction, stainless steel prices are expected to avoid further significant declines.
Futures side, the most-traded contract 2512 showed relatively strong and rangebound fluctuation. At 10:30 am, SS2511 was quoted at 12,615 yuan/mt, up 90 yuan/mt from the previous trading day. Spot premiums/discounts for 304/2B in Wuxi ranged between 405-705 yuan/mt. In the spot market, cold-rolled 201/2B coil in Wuxi averaged 8,000 yuan/mt; cold-rolled mill-edge 304/2B coil averaged 13,000 yuan/mt in both Wuxi and Foshan; cold-rolled 316L/2B coil in Wuxi and Foshan was 25,500 yuan/mt; hot-rolled 316L/NO.1 coil was quoted at 24,950 yuan/mt in both locations; cold-rolled 430/2B coil in Wuxi and Foshan was 7,600 yuan/mt.
Despite the traditional September-October peak season, stainless steel planned production for October increased further, expected to approach 3.45 million mt again. However, the recovery in end-use demand fell short of expectations, with persistently sluggish market purchases and transactions, leading to a halt in the previous destocking trend for stainless steel. Social inventory rose significantly within the week, reaching 950,000 mt. Cost side, affected by weak stainless steel market conditions, high-grade NPI prices pulled back due to weakened trader confidence and increased willingness to sell. The previous tight supply situation for high-carbon ferrochrome eased, and prices loosened from highs as ferrochrome producers maintained good profit margins. Currently, the stainless steel spot market remains influenced by macro factors and futures price fluctuations driven by capital flows. China-US trade friction, expectations for US Fed interest rate cuts, and policy guidance from the domestic 20th Fourth Plenum all contribute to significant market uncertainty. Subsequent attention should continue to be paid to changes in the macro environment and the demand for stainless steel.
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