SS Futures Continue to Decline Amid Market Pessimism, Low Stainless Steel Prices Fail to Boost Transactions [SMM Stainless Steel Daily Review]

SMM November 4 news, SS futures trended downward. Today, ferrous metals and SHFE nickel futures weakened overall, and SS futures followed with further declines, approaching 12,500 yuan/mt during the session, remaining in the doldrums. In the spot market, the consecutive declines in SS futures further intensified cautious wait-and-see sentiment in the stainless steel end-use market. Although stainless steel mills lifted price restrictions yesterday, leading to further declines in stainless steel offers, this failed to boost actual transactions, with market inquiries and deals remaining weak.

The most-traded SS2512 futures contract fell. At 10:30 a.m., SS2512 was quoted at 12,560 yuan/mt, down 65 yuan/mt from the previous trading day. In Wuxi, the spot premium/discount for 304/2B was in the range of 360-660 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was 8,050 yuan/mt; for cold-rolled edged 304/2B coil, the average price in Wuxi was 12,900 yuan/mt, and in Foshan 12,900 yuan/mt; for cold-rolled 316L/2B coil in Wuxi, 25,150 yuan/mt, and in Foshan 25,200 yuan/mt; for hot-rolled 316L/NO.1 coil in Wuxi, 24,550 yuan/mt; for cold-rolled 430/2B coil in both Wuxi and Foshan, 7,600 yuan/mt.

Although SS futures had been rising previously, their impact on the stainless steel spot market was limited. The traditional peak consumption season for stainless steel, the September-October peak season, ended early, with downstream end-users dominated by cautious wait-and-see sentiment, mostly maintaining purchasing as needed, and demand remained weak. In October, stainless steel production remained at high levels, and market digestion pressure was still significant. Social inventory of stainless steel ended the previous destocking trend and recently showed inventory buildup. Cost side, although the November steel tender price for high-carbon ferrochrome was announced steadily this week, retail prices remained in the doldrums. High-grade NPI saw slight declines due to steel mills driving down prices, leading to a downward shift in the cost center for stainless steel. Recently, several stainless steel mills announced production cuts for 200-series stainless steel, but production for 300-series and 400-series remained mostly stable, with the overall actual production decline expected to be limited. China-US trade friction eased significantly, with previously imposed tariffs suspended, and macro policies were relatively favorable. However, the current weak fundamentals remain difficult to improve, and further attention is needed on the implementation of production cuts by stainless steel mills.