SS Futures Cease Decline and Recover, Stainless Steel Market Sentiment Warms Up, Inquiries Increase [SMM Stainless Steel Daily Report]

SMM November 10 news, SS futures stopped falling and rebounded. Although SS futures extended the previous weakness in the morning and traded at low levels, they recovered in the afternoon, driven by the strength in ferrous metals and the already low prices, approaching above 12,600 yuan/mt by the close. In the spot market, traders' quotations mostly held steady from last week with little change in the morning. However, as SS futures climbed in the afternoon, market sentiment strengthened, inquiries increased, traders' willingness to offer discounts decreased, quotations rose, and transactions recovered somewhat during the day as prices had reached low levels.

The most-traded SS futures contract stopped falling and recovered. At 10:30 am, SS2601 was quoted at 12,565 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 305-605 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was reported at 8,050 yuan/mt; the average price for cold-rolled mill-edge 304/2B coil was 12,850 yuan/mt in Wuxi and 12,850 yuan/mt in Foshan; the price for cold-rolled 316L/2B coil in Wuxi was 25,150 yuan/mt, and 25,200 yuan/mt in Foshan; the price for hot-rolled 316L/NO.1 coil in Wuxi was reported at 24,550 yuan/mt; the price for cold-rolled 430/2B coil in both Wuxi and Foshan was 7,600 yuan/mt.

Formally leaving behind the traditional consumption off-season of the September-October peak season and entering the year-end off-season. The already weak confidence of downstream end-users was further dampened by the recent continuous decline in SS futures. Market inquiries and purchasing activities were sluggish, with downstream users mostly maintaining just-in-time procurement. Although mainstream steel mills first canceled price restrictions and then lowered their listed prices to actively sell, the continuous decline in spot prices did not have a significant positive impact on boosting demand. Driven by the mentality of "rushing to buy amid continuous price rise and holding back amid price downturn," market trading activity remained low. Although news of production cuts by steel mills was frequently reported earlier, the actual implemented cuts in November were relatively limited, mainly concentrated in the 200-series stainless steel, which had seen significant production increases previously, while production of 300-series and 400-series stainless steel remained basically stable, and supply is expected to remain at high levels. Cost side, although steel mills are currently in a state of cost-price inversion, under recent market weakness and pessimistic expectations, prices of high-grade NPI, high-carbon ferrochrome, and even stainless steel scrap have declined, lowering the cost center for stainless steel and providing unstable support for prices. However, current stainless steel prices are already at low levels, and export demand is expected to increase after the easing of Sino-US trade friction, coupled with the US Fed's interest rate cut cycle, making it difficult for stainless steel prices to fall significantly further. Subsequent attention should still be paid to the implementation of production cuts by steel mills and downstream demand conditions.