SMM, November 14 - SS futures showed a further weakening and downward trend. Due to hawkish remarks from the US Fed, nonferrous metals generally fell today, and SS futures followed suit, with the intraday low dropping to 12,355 yuan/mt. In the spot market, trading was already sluggish due to the continuous bottom-grinding of SS futures and year-end off-season expectations. Additionally, raw material prices weakened simultaneously this week, loosening cost support for stainless steel, which further intensified the market's cautious and bearish sentiment. This week's transaction situation struggled to change the weak pattern; although steel mill agents successively offered discounts and lowered prices, the price reductions did not positively impact transactions, and the market's weak conditions persisted. Social inventory increased slightly this week, up 0.71% WoW to 952,200 mt.
The most-traded SS futures contract weakened and declined. At 10:30 am, SS2601 was quoted at 12,415 yuan/mt, down 65 yuan/mt from the previous trading day. In Wuxi, spot premiums/discounts for 304/2B were in the range of 355-655 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 12,750 yuan/mt in Wuxi and 12,800 yuan/mt in Foshan; the price for cold-rolled 316L/2B coil was 24,300 yuan/mt in Wuxi and 24,350 yuan/mt in Foshan; hot-rolled 316L/NO.1 coil was quoted at 23,800 yuan/mt in Wuxi; the price for cold-rolled 430/2B coil was 7,600 yuan/mt in both Wuxi and Foshan.
Stainless steel entered the consumption off-season at year-end, with significantly weak downstream demand and a relatively pessimistic market sentiment. In the short term, the impact of macro policy benefits has recently gradually faded. Against the backdrop of declining SHFE nickel and ferrous metals prices and weak fundamentals, SS futures continued to grind at the bottom, currently at relatively low levels for the year, but the market's bearish sentiment has not dissipated. Supply side, although multiple stainless steel mills announced production cut plans at year-end, the actual implementation of cuts in November was limited, and the reductions were mainly concentrated in the 200-series stainless steel, which had seen significant production increases earlier; production of 300-series and 400-series stainless steel remained basically stable, resulting in a limited overall supply decrease. Cost side, losses for stainless steel mills persisted, and their acceptance of high-priced raw materials was low. Coupled with the influence of pessimistic market expectations, mills pressed down on raw material purchase prices. Prices for high-carbon ferrochrome, high-grade NPI, and stainless steel scrap all trended weaker, leading to a downward shift in the cost center for stainless steel and weakening price support. Current stainless steel prices are already at low levels, facing resistance to further declines. However, given the current weak demand, limited production cuts by stainless steel mills, and weakened cost support, stainless steel prices are expected to maintain a weak trend.
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