SS Futures Slightly Rose, Stainless Steel Spot Cargo Saw Phased Concentrated Trading [SMM Stainless Steel Daily Report]

SMM December 2 news, SS futures showed a further slight upward trend. Today, driven by the continued strength of ferrous metals and SHFE nickel futures, SS futures also strengthened, but the gains were limited due to weak fundamentals, with the intraday high approaching 12,500 yuan/mt. In the spot market, as SS futures strengthened, market confidence returned, and stainless steel spot purchases were active yesterday. Stainless steel traders raised their quotes, but today's futures rally slowed down, and with recent concentrated transactions, downstream demand was largely met, leading to weaker trading today.

The most-traded SS futures contract strengthened and probed higher. At 10:30 AM, SS2601 was at 12,415 yuan/mt, up 45 yuan/mt from the previous trading day. In Wuxi, the spot premiums and discounts for 304/2B were in the range of 355-555 yuan/mt. In the spot market, Wuxi cold-rolled 201/2B coils were quoted at 7,950 yuan/mt; cold-rolled 304/2B coils, with trimmed edges, averaged 12,700 yuan/mt in Wuxi and 12,700 yuan/mt in Foshan; Wuxi cold-rolled 316L/2B coils were at 23,775 yuan/mt, and Foshan at 23,775 yuan/mt; hot-rolled 316L/NO.1 coils in Wuxi were at 23,000 yuan/mt; and cold-rolled 430/2B coils in both Wuxi and Foshan were at 7,600 yuan/mt.

Recently, after the US Fed released dovish signals, the possibility of an interest rate cut in December has increased, and US dollar liquidity may become even looser. Driven by this macro tailwind, the overall metal futures market has shown a strengthening trend. Among them, SS futures ended the continuous decline since late October, rebounding from the lowest point since 2020. Meanwhile, spot prices also rebounded. Influenced by the "rush to buy amid continuous price rise and hold back amid price downturn" sentiment, and with trading firms engaging in both spot and futures market buying spot to cover short positions, along with the release of previously suppressed demand due to cautious observation during the price drop, market demand significantly recovered. From the supply side, several steel mills recently announced production cuts, mainly expanding from 200-series stainless steel to 400-series, and a steel mill in Guangxi plans to halt production for maintenance in December. Although the actual reduction in output remains to be seen, a general decrease in stainless steel production seems certain. On the cost side, high-grade NPI prices have further declined. Despite falling below the cost line for domestic NPI producers, the price is unlikely to find support given the overall weak market, weakening the cost support for stainless steel. Although stainless steel prices have risen recently due to macro tailwinds and production cut announcements, the weakened cost support and persistently weak year-end demand have kept market pessimism high, posing a risk of pullback.