SS Futures Cease Declines and Recover, Lack of Confidence Prevents Stainless Steel Spot Prices from Following the Rise [SMM Stainless Steel Daily Report]

SMM November 6 news, SS futures stopped falling and rebounded. Today, SS futures remained in the doldrums before noon, but SHFE nickel rose sharply in the afternoon driven by news, and SS followed the upward trend, breaking the previous weak trend and approaching 12,600 yuan/mt near the close. In the spot market, affected by the pullback in the listing price of a major stainless steel mill in South China yesterday, traders' offers further declined in the morning, with market sentiment remaining pessimistic. Even price cuts failed to improve transactions. In the afternoon, influenced by the strengthening futures, offers rebounded somewhat, and inquiry activity increased, but actual transaction volume remained low. This week, social inventory increased slightly, down 0.14% WoW to 945,500 mt.

The most-traded SS2512 futures contract stopped falling and recovered. At 10:30 a.m., SS2512 was quoted at 12,550 yuan/mt, down 5 yuan/mt from the previous trading day. In Wuxi, the spot premiums/discounts for 304/2B were in the range of 320-620 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi was 8,050 yuan/mt; the average price of cold-rolled mill edge 304/2B coil was 12,850 yuan/mt in Wuxi and 12,850 yuan/mt in Foshan; the price of cold-rolled 316L/2B coil in Wuxi was 25,150 yuan/mt and 25,200 yuan/mt in Foshan; the price of hot-rolled 316L/NO.1 coil in Wuxi was 24,550 yuan/mt; the price of cold-rolled 430/2B coil in both Wuxi and Foshan was 7,600 yuan/mt.

Although SS futures continued to rise earlier, their driving effect on the stainless steel spot market was relatively limited. The traditional peak consumption season for stainless steel, the September-October peak season, ended early. Downstream end-users were dominated by cautious wait-and-see sentiment, mostly maintaining purchasing as needed, with weak demand performance. In October, stainless steel production remained at a high level, and market digestion pressure remained 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 still dropped slightly under steel mills' efforts to drive down prices, leading to a downward shift in the cost center of stainless steel. Recently, news emerged that several stainless steel mills would cut production of 200-series stainless steel, but production of 300-series and 400-series remained mostly stable, and the overall actual production decline is expected to be limited. China-US trade friction eased significantly, with many 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.