SS futures in the doldrums, stainless steel spot cargo sluggish [SMM Stainless Steel Daily Report]

SMM October 20, SS futures were in the doldrums. The weakening SHFE nickel dragged down SS futures, with prices hovering around 12,600 yuan/mt during the day. In the spot market, the weak trend continued from last week. The weak futures affected market sentiment, and trading remained sluggish. Although prices were generally stable, traders offered discounts under sales pressure, with occasional low prices reported.

Futures side, the most-traded contract 2512 was in the doldrums. At 10:30 am, SS2511 was quoted at 1,230 yuan/mt, up 15 yuan/mt from the previous trading day. In Wuxi, the spot premiums/discounts for 304/2B were in the range of 390-690 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi was 8,000 yuan/mt; the average price of cold-rolled mill edge 304/2B coil was 13,000 yuan/mt in both Wuxi and Foshan; the price of cold-rolled 316L/2B coil was 25,500 yuan/mt in Wuxi and Foshan; the price of hot-rolled 316L/NO.1 coil was 24,950 yuan/mt in both locations; the price of cold-rolled 430/2B coil was 7,600 yuan/mt in both Wuxi and Foshan.

Despite the traditional September-October peak season, stainless steel planned production increased further in October and was expected to approach 3.45 million mt again. However, the recovery in end-use demand fell short of expectations, and market purchases remained sluggish, leading to an end to the previous destocking trend. Social inventory rose significantly during the week, reaching 950,000 mt. Cost side, affected by the weak stainless steel market, high-grade NPI prices pulled back due to traders' lack of confidence and increased willingness to sell. The previous tight supply of high-carbon ferrochrome eased, and prices loosened from high levels as ferrochrome producers maintained good profit margins. Currently, the stainless steel spot market is still affected by macro factors and capital-driven futures price fluctuations. The China-US trade friction, expectations for US Fed interest rate cuts, and policy guidance from the domestic Fourth Plenary Session of the 20th Central Committee all create significant uncertainty for the market. Going forward, close attention should be paid to changes in the macro environment and stainless steel demand.