SS Futures Continue to Bottom Out, Stainless Steel Spot Prices Remain Weak [SMM Stainless Steel Daily Report]

SMM November 18 news, SS futures are in the doldrums. Driven by the decline in SHFE nickel futures, SS futures further dipped, trading below 12,400 yuan/mt throughout the day, with the low again approaching 12,300 yuan/mt.

In the spot market, due to the weak and bottom-grinding trend of SS futures, the performance of the stainless steel spot market is also poor. Although mainstream steel mills previously lowered their listed prices, bringing spot prices to low levels, market demand has not been significantly boosted, and transactions remain sluggish.

The most-traded SS futures contract was in the doldrums. At 10:30 a.m., SS2601 was quoted at 12,355 yuan/mt, down 35 yuan/mt from the previous trading day. In Wuxi, the spot premiums/discounts for 304/2B were in the range of 365-615 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was reported at 8,025 yuan/mt; the average price for cold-rolled mill-edge 304/2B coil was 12,675 yuan/mt in Wuxi and 12,700 yuan/mt in Foshan; the price for cold-rolled 316L/2B coil was 24,300 yuan/mt in Wuxi and 24,300 yuan/mt in Foshan; the price for hot-rolled 316L/NO.1 coil was reported at 23,700 yuan/mt in Wuxi; 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 downstream demand significantly weak and market sentiment relatively pessimistic. 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 continue to grind at the bottom, currently at relatively low levels for the year, but the bearish market sentiment has not yet dissipated. Supply side, although several steel mills announced production cut plans at year-end, the actual implementation of cuts in November was limited, and the cuts 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 at steel mills persist, and their acceptance of high-priced raw materials is low. Coupled with the influence of pessimistic market expectations, mills are pressing down prices when purchasing raw materials. 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 current weak demand, limited production cuts by steel mills, and weakened cost support, stainless steel prices are expected to maintain a weak trend.