SS Futures Strengthen with Recovering Transactions, Production Cuts Fall Short of Expectations but Inventory Shows Slight Increase [SMM Analysis]

SMM December 4th report, this week (November 28-December 4, 2025), the total inventory in the two major stainless steel markets of Wuxi and Foshan showed a slight trend of inventory buildup, increasing from 946,000 mt on November 27, 2025 to 946,900 mt on December 4, up 0.1% WoW.

This week, social inventory of stainless steel saw a further small increase. Despite the overall strengthening trend of metal futures at the beginning of the week driven by macro tailwinds, with SS futures performing particularly well, market confidence was boosted, leading to a good start for the spot market of stainless steel in December, with transactions recovering noticeably. However, the upward momentum of spot prices was limited, remaining largely stable, and the enthusiasm for cargo pick-up downstream was not high. In addition, with stable arrivals at stainless steel mills, an increase in return shipments from Indonesia, and low actual implementation of production cuts at stainless steel mills, there was a slight rise in social inventory of stainless steel, but the increase was quite limited. The market conditions driven by macro tailwinds lacked sustainability, with spot transactions showing a phased concentration, indicating some overdrawn future demand. Year-end demand is unlikely to see a significant improvement, and the possibility of further strong macro stimulus is also low; the market is closely watching the implementation of production cuts at stainless steel mills in December.