SMM, November 12 - SS futures showed a further downward trend, pulling back. Driven by a continued decline in SHFE nickel and weak fundamentals in the stainless steel sector, SS futures continued to fall today, again breaking below 12,500 yuan/mt, with the intraday low reaching 12,460 yuan/mt. In the spot market, the weakness in the futures market once again dragged down spot prices. Additionally, stainless steel transactions have been persistently sluggish recently, with traders holding pessimistic expectations for the year-end market and exhibiting a mindset of liquidating goods to recover funds. Meanwhile, prices for high-grade NPI, high-carbon ferrochrome, and stainless steel scrap have all been in the doldrums recently, lowering the cost center for stainless steel, and intraday offers saw another slight decrease.
The most-traded SS futures contract moved lower, pulling back. At 10:30 a.m., the SS2601 contract was quoted at 12,485 yuan/mt, down 75 yuan/mt from the previous trading day. In Wuxi, the spot premium/discount for 304/2B was in the range of 333-685 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was reported at 8,050 yuan/mt; for cold-rolled mill-edge 304/2B coil, the average price in Wuxi was 12,825 yuan/mt, and in Foshan, 12,850 yuan/mt; for cold-rolled 316L/2B coil in Wuxi, the price was 24,500 yuan/mt, and in Foshan, 24,550 yuan/mt; for hot-rolled 316L/NO.1 coil, Wuxi reported 23,800 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 insufficient confidence among downstream end-users was further dampened by the recent continuous decline in SS futures. Market inquiries and purchasing activities were sluggish, with most downstream users maintaining only just-in-time procurement. Although mainstream steel mills first canceled price restrictions and then lowered their listed prices to actively move goods, the continuous decline in spot prices did not have a significant positive impact on boosting demand. Under the mentality of "rushing to buy amid continuous price rise and holding back amid price downturn," market transaction activity remained low. Although news of production cuts from stainless 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 stay at relatively high levels. Cost side, although stainless steel mills are currently in a situation of cost-price inversion, amid recent market weakness and pessimistic expectations, prices for high-grade NPI, high-carbon ferrochrome, and even stainless steel scrap have declined, leading to a downward shift in the stainless steel cost center, 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 a further significant decline in stainless steel prices relatively difficult. Subsequent attention should still be paid to the implementation of production cuts by stainless steel mills and the demand situation downstream.
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