Low Prices Fail to Revive Weak Stainless Steel Transactions, Year-End Off-Season Market Pessimistic [SMM Stainless Steel Daily Report]

SMM November 19, SS futures were in the doldrums. Today, SS futures continued the previous day's weak trend, with the intraday low once again falling to a multi-year low of 12,310 yuan/mt. In the spot market, influenced by SS futures fluctuating at lows and the already weak year-end stainless steel demand, even as steel mills continued to lower their listed prices, market purchasing sentiment did not see a significant boost. With declining cost prices, downstream cautious wait-and-see sentiment remained strong.

The most-traded SS futures contract was in the doldrums. At 10:30 a.m., SS2601 was quoted at 12,335 yuan/mt, down 20 yuan/mt from the previous trading day. In Wuxi, the spot premium/discount for 304/2B was in the range of 385-635 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was 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 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 entered the consumption off-season at year-end, with significantly weak downstream market demand and a relatively pessimistic market sentiment. In the short term, the impact of macro policy benefits has gradually faded recently. With SHFE nickel and ferrous metals prices declining and weak fundamentals, SS futures continued to bottom out, currently at relatively low levels for the year, but the market's bearish sentiment has not yet dissipated. Supply side, although multiple stainless steel mills reported 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, with the overall supply decline limited. Cost side, steel mills continued to experience losses, with low acceptance of high-priced raw materials. Coupled with the influence of pessimistic market expectations, mills pressed down on raw material purchase prices, with high-carbon ferrochrome, high-grade NPI, and stainless steel scrap prices all trending weakly, leading to a downward shift in the stainless steel cost center and reduced support for prices. Current stainless steel prices are already at low levels, facing 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.