Macro Tailwinds Drive Stainless Steel Scrap Prices Higher, Narrowing Economic Advantages Limit Upward Momentum [SMM Stainless Steel Scrap Market Weekly Review]

This week, the price of 304 stainless steel scrap off-cuts in east China held steady at 9,100-9,200 yuan/mt; in Foshan, the price of 304 stainless steel scrap off-cuts rose slightly to 8,950-9,250 yuan/mt. Currently, calculated by raw material, the production cost of stainless steel using entirely stainless steel scrap is approximately 12,825 yuan/mt, while the cost using entirely high-grade NPI is approximately 12,970.14 yuan/mt. This week, a steel mill in south China did not adjust its tax-included procurement price for 304 stainless steel scrap.

This week, under the continuous influence of favorable macro policies, stainless steel futures extended their rebound, boosting market sentiment. Trading activity in the spot finished product market improved, with some traders raising their offers slightly and transaction volumes recovering. On the raw material side, high-grade NPI prices stopped falling and strengthened, showing some increase; high-carbon ferrochrome prices generally remained stable. Stainless steel scrap, driven by the futures and finished product markets, also saw synchronized price increases at the start of the week. However, entering December, steel mills' production schedules generally indicated a reduction trend, and the expected procurement demand for stainless steel scrap was projected to weaken accordingly. Although recent macro tailwinds spurred a short-term market recovery and a slight price increase for stainless steel scrap, overall market sentiment remained cautious, with most traders adopting a wait-and-see attitude. Actual transactions did not show significant improvement, and the standoff between sellers and buyers continued. From an economic comparison perspective, although high-grade NPI prices recently stopped falling and rebounded, the increase was less pronounced than that for stainless steel scrap, leading to a further narrowing of the price spread between the two. The cost advantages of stainless steel scrap weakened. Currently, stainless steel scrap prices are in a historically low range, and with cost support, the resistance to further significant declines is substantial. Compared to high-grade NPI, stainless steel scrap still retains some economic space, but the advantage is no longer significant. Overall, as the positive macro sentiment is gradually digested, the traditional year-end off-season effect will continue to pressure the market. Against the backdrop of intertwined expectations for production cuts by steel mills and cost support, bullish and bearish factors continue to contend. In the short term, stainless steel scrap prices are expected to continue fluctuating within a range, with limited upward momentum, and caution is warranted against downside risks from weakening demand.