[SMM Stainless Steel Daily Review] US Fed Interest Rate Cut Lands as Expected, Market Returns to Fundamentals, SS Futures Hold Steady, Stainless Steel Spot Trading Sluggish

 SMM December 11 - SS futures were in the doldrums. Although the US Fed cut interest rates by 25 basis points as scheduled, which aligned with earlier expectations and had already been priced in by the market, it did not cause significant fluctuations. During the day, prices once surged to near 12,700 yuan/mt before pulling back. In the spot market, SS futures were basically stable, with the spot market returning to fundamentals. Downstream restocking was largely completed earlier, transactions remained sluggish, and some traders offered slight discounts to move cargo. Social inventory accumulated this week, up 0.07% WoW to 947,600 mt. The most-traded SS contract was weak. At 10:30 a.m., SS2602 was quoted at 12,675 yuan/mt, up 110 yuan/mt from the previous trading day. In Wuxi, spot premiums/discounts for 304/2B were in the range of 195-395 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was 8,000 yuan/mt; for cold-rolled mill-edge 304/2B coil, the average price was 12,800 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 price in Wuxi was 23,000 yuan/mt; for cold-rolled 430/2B coil, the price was 7,600 yuan/mt in both Wuxi and Foshan. This week, the US Fed's rate cut landed as expected, but as the positive news had already been digested by the market, the boost to macro sentiment was limited. Although SS futures surged at one point, with the clear year-end policy stabilization tone, further stimulus expectations faded, and upward momentum in futures was noticeably insufficient, resulting in a weak rebound pattern of retreating after a rapid rise. The spot market performed even weaker. Only low-priced resources saw a slight increase in transactions at the beginning of the week, with downstream players generally adopting a wait-and-see attitude and restocking willingness remaining low. Traders reported persistently insufficient orders, and the year-end demand contraction trend has become a foregone conclusion. The supply-demand imbalance further intensified, with social inventory increasing slightly by 0.07% WoW to 947,600 mt, making destocking pressure increasingly evident. Although mainstream steel mills frequently announced planned production cuts for December, the actual reduction in the production schedule may only be 4.15%, far below expectations. Amid the pattern of strong supply and weak demand, actual transaction prices frequently saw hidden declines. Meanwhile, prices for nickel pig iron and ferrochrome continued to fall, further weakening cost support. Overall, the stainless steel market currently faces triple pressures: a vacuum in macro drivers, a fundamental supply-demand imbalance, and collapsing cost support. Although futures were briefly lifted by external factors, they lack intrinsic momentum. Short-term upward momentum is expected to remain insufficient, with certain downside risks still present.