SS Futures Cease Decline and Rise, Stainless Steel Spot Cargo Transactions Recover [SMM Stainless Steel Daily Report]

SMM November 25 news, SS futures showed a strengthening and upward trend. Influenced by the increasing likelihood of a US Fed interest rate cut in December, metal futures continued their strengthening trend from the previous day, rising across the board. SS futures also strengthened, breaking through 12,400 yuan/mt and reaching an intraday high of 12,450 yuan/mt. In the spot market, driven by the rebound and strength in SS futures, market sentiment recovered, with market quotations showing a slight upward tendency. Steel mill agents raised their offers in the afternoon. Previously, stainless steel prices had been declining continuously, suppressing some demand. The recent price rebound led to a concentrated release of purchasing demand, and transaction activity recovered.

The most-traded SS futures contract stopped falling and recovered. At 10:30 AM, the SS2601 contract was quoted at 12,380 yuan/mt, up 25 yuan/mt from the previous trading day. In the Wuxi region, the spot premium/discount for 304/2B was in the range of 340-490 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 12,625 yuan/mt in Wuxi and 12,650 yuan/mt in Foshan; the price for cold-rolled 316L/2B coil was 23,800 yuan/mt in Wuxi and 23,800 yuan/mt in Foshan; the price for hot-rolled 316L/NO.1 coil was reported at 23,250 yuan/mt in Wuxi; the price for cold-rolled 430/2B coil was 7,600 yuan/mt in both Wuxi and Foshan.

Year-end is the off-season, with stainless steel demand remaining persistently weak, and prices continuously grinding at the bottom and probing lower. Coupled with the macro headwinds from the potential disappointment of expectations for a US Fed interest rate cut in December, SS futures successively broke through new lows since 2020. Stainless steel mill list prices also lost their firmness, showing a pullback trend. However, pessimistic and bearish sentiment in the market has not dissipated, and low prices have not significantly boosted recent transactions, with traders generally reporting sluggish recent activity. Supply side, rumors of production cuts at stainless steel mills circulated frequently in November, with the affected steel grades expanding from the 200-series stainless steel at the beginning of the month to include the 400-series stainless steel, but the actual implementation of these cuts still requires further attention. Cost side, with stainless steel prices at low levels, despite continued declines in high-carbon ferrochrome and high-grade NPI prices during the week, stainless steel mills still faced a situation where costs were inverted with selling prices. During the week, a major mainstream stainless steel mill announced purchase tender prices for high-grade NPI and high-carbon ferrochrome successively; the force of further price reductions weakened, especially for high-carbon ferrochrome, where the price was significantly higher than the market retail price, indicating a clear intention to secure raw material supply. Expectations for the extent of future production cuts may decrease.