SMM reported on December 3 that SS futures were in the doldrums. SHFE nickel futures saw a slight correction today. Given the already weak fundamentals of SS futures, they followed suit with a synchronous pullback, though intraday fluctuations were relatively small.
In the spot market, earlier strength in SS futures drove a significant recovery in spot transactions and price increases at the start of the week. However, after futures lacked further upward momentum, spot stainless steel transactions turned sluggish again. Although spot offers remained stable for the time being, supported by traders' efforts to hold prices firm and a temporary stabilization in futures, the number of transactions with small price concessions has increased.
The most-traded SS contract was in the doldrums. At 10:30 a.m., the SS2601 contract was quoted at 12,455 yuan/mt, up 40 yuan/mt from the previous trading day. In Wuxi, the spot premium/discount for 304/2B was in the range of 315-515 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was 7,950 yuan/mt; for cold-rolled mill-edge 304/2B coil, the average price was 12,700 yuan/mt in both Wuxi and Foshan; for cold-rolled 316L/2B coil, the price was 23,775 yuan/mt in Wuxi and Foshan; for hot-rolled 316L/NO.1 coil, the Wuxi price was 2,300 yuan/mt; for cold-rolled 430/2B coil, the price was 7,600 yuan/mt in both Wuxi and Foshan.
Recently, after the US Fed released dovish signals, the likelihood of an interest rate cut in December increased again, and US dollar liquidity is expected to become looser. Driven by this macro tailwind, the metal futures market overall showed a strengthening trend. Among them, SS futures ended the continuous decline since late October and rebounded from the low since 2020. Meanwhile, spot prices also rebounded synchronously. Influenced by the market sentiment of rushing to buy amid continuous price rise and holding back amid price downturn, along with trading firms engaging in both spot and futures markets purchasing spot cargo to close short futures positions, and the concentrated release of demand previously suppressed by cautious wait-and-see attitudes due to price declines, market demand recovered noticeably. Supply side, recent news of production cuts emerged from several steel mills. The scope of cuts mainly expanded from the 200-series stainless steel to the 400-series, and a steel mill in Guangxi is expected to undergo maintenance shutdown in December. Although the actual implemented cut volume remains to be seen, an overall decline in stainless steel production appears certain. Cost side, high-grade NPI prices pulled back further. Although the price has fallen below the cost line of domestic nickel pig iron producers, it is difficult to find support amid overall market weakness, further weakening the cost support for stainless steel. Although recent stainless steel prices rose stimulated by macro tailwinds and news of mill production cuts, due to weakened cost support and persistently sluggish year-end demand, market pessimism remains pervasive, and there is still some risk of a pullback.
![Before the holiday, the black chain is unlikely to see a trend-driven market [SMM Steel Industry Chain Weekly Report].](https://imgqn.smm.cn/usercenter/zUFfM20251217171748.jpg)
![[SMM Chromium Daily Review] Inquiries and Transactions Weakened, Chromium Market Showed Mediocre Performance Before the Holiday](https://imgqn.smm.cn/usercenter/ENDOs20251217171718.jpg)
