US Fed's Hawkish Remarks Drive SS Below Recent Lows, Stainless Steel Mills Lower Prices and Actively Ship Goods [SMM Stainless Steel Daily Report]

SMM November 17 news, SS futures showed a trend of hitting bottom and then recovering. During Friday's night session, SS futures continued to be affected by weakened expectations for US Fed interest rate cuts, with the opening price pulling back further, breaking below the nearly five-year low to reach 12,310 yuan/mt. The market gradually recovered after Monday's opening, closing at 12,415 yuan/mt by the end of the session. In the spot market, large stainless steel mills lowered their 304 stainless steel list prices by 200 yuan/mt in the morning, and agent prices followed the decline, probing lower. With prices already at relatively low levels, market activity improved somewhat, and inquiries increased. Downstream demand remained weak, market expectations were pessimistic, and as raw material prices also pulled back, steel mills are currently focused on actively reducing prices to move inventory.

The most-traded SS futures contract weakened and moved lower. At 10:30 AM, the SS2601 contract was quoted at 12,390 yuan/mt, down 65 yuan/mt from the previous trading day. In the Wuxi region, spot premiums/discounts for 304/2B were in the range of 380-580 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 trimmed 304/2B coil was 12,700 yuan/mt in Wuxi and 12,750 yuan/mt in Foshan; the price for cold-rolled 316L/2B coil in Wuxi was 24,300 yuan/mt, and 24,300 yuan/mt in Foshan; the price for hot-rolled 316L/NO.1 coil in Wuxi was reported at 23,700 yuan/mt; the price for cold-rolled 430/2B coil was 7,600 yuan/mt in both Wuxi and Foshan.

Stainless steel has entered the consumption off-season at year-end, with significantly weak downstream demand and a pessimistic market sentiment. In the short term, the positive impact of macro policy support has recently faded. Against the backdrop of falling SHFE nickel and ferrous metals prices, coupled with weak fundamentals, SS futures continue to grind along the bottom and are currently at relatively low levels for the year, yet bearish sentiment persists. Supply side, although production cut plans from several stainless steel mills emerged towards 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 largely stable, resulting in a limited overall supply decrease. Cost side, losses for stainless steel mills persist, and their acceptance of high-priced raw materials remains low. Influenced by pessimistic market expectations, mills are pressing down prices for raw material procurement. Prices for high-carbon ferrochrome, high-grade NPI, and stainless steel scrap are all trending weakly. The cost center for stainless steel has shifted downward, weakening price support. Current stainless steel prices are already at low levels, posing resistance to further declines. However, given the weak demand, limited production cuts by mills, and weakened cost support, stainless steel prices are expected to maintain a weak trend.