Macro Tailwinds Expected to Boost Futures, Stainless Steel Futures Fluctuate Upward but Fundamentals Remain Weak [SMM Stainless Steel Futures Weekly Review]

SMM data showed that the most-traded SS futures contract fluctuated upward this week. As of 10:30 on October 24, the SS2512 contract was quoted at 12,805 yuan/mt, up about 175 yuan/mt from the closing price of 12,630 yuan/mt on October 17. Futures continued the bottom-hitting and recovery trend, with trading volume increasing slightly and open interest declining slightly, indicating that market funds were mainly engaged in short-term operations, and overall sentiment was cautious.

From a macro perspective, recent economic data were generally positive. Data released by the National Bureau of Statistics (NBS) on October 18 showed that China's gross domestic product (GDP) grew 4.8% YoY in Q3 2025, with cumulative growth of 5.2% in the first three quarters. Manufacturing output rose 6.3% YoY, showing steady performance and supporting the downstream stainless steel sector, while real estate fell 0.2% YoY, remaining a major drag on demand recovery. Value-added industrial output from large enterprises increased 5.8% YoY in September, indicating resilient industrial activity. The loan prime rate (LPR) announced on October 20 remained unchanged, with the one-year rate at 3.0% and the five-year rate at 3.5%, reflecting steady monetary policy but limited credit stimulus.

On the policy front, the Fourth Plenary Session of the 20th Central Committee of the Communist Party of China, held from October 20 to 23, emphasized "boosting confidence and gaining strategic initiative," anchored the development goals for the 15th Five-Year Plan, and called for expanding high-level opening-up, promoting trade innovation, and high-quality Belt and Road cooperation. The meeting set the tone for parallel progress in stabilizing growth and structural upgrading, with expectations of stronger manufacturing and infrastructure investment, providing support for medium and long-term stainless steel consumption.

In international markets, US Fed officials stated in recent remarks that, although US inflation has slowed down, interest rates need to remain high until price stability is achieved.

From a fundamental analysis, stainless steel production in October is expected to be about 3.44–3.46 million mt, increasing slightly MoM. Despite entering the traditional peak consumption season, demand from the consumption side has not yet recovered significantly. Sample inventory was about 946,400 mt, down 0.65% WoW, with destocking pace restarting, providing real support for futures.

Cost side, high-grade NPI prices continued to pull back due to sluggish market trading and traders' selling sentiment. For high-carbon ferrochrome, the previous tightness eased, and offers fell by 50–100 yuan/mt (50% metal content) WoW. Meanwhile, South Africa continued to discuss chrome ore export controls; if the policy is formally implemented, it will provide potential support for ferrochrome costs in Q4.

Overall, the rise in stainless steel futures this week was mainly driven by macro expectations and sentiment, while fundamentals remained weak and spot cargo struggled to catch up. Short-term prices may hover at highs, making it difficult to sustain a continuous upward trend. Subsequent attention should be paid to whether inventory destocking can continue, substantial recovery in end-use demand, and price changes in raw materials.