Stainless Steel Daily Review: SS Futures Trend Lower, Spot Market Trading Sluggish

SMM December 15 news, SS futures showed a further weakening and declining trend. Today, driven by the pullback in SHFE nickel, SS futures continued to weaken and decline, probing down to 12,460 yuan/mt during the session. In the spot market, SS futures were largely stable before noon, with market offers generally firm and even some upward probing, but after noon, following the retreat in SHFE nickel, market sentiment weakened, and offers were further adjusted downward. The year-end off-season demand is difficult to reverse, and market transactions are mainly based on rigid demand.

The most-traded SS futures contract weakened and declined. At 10:30 AM, SS2602 was quoted at 12,555 yuan/mt, down 15 yuan/mt from the previous trading day. In Wuxi, the spot premiums/discounts for 304/2B were in the range of 265-465 yuan/mt. In the spot market, in Wuxi, the average price for 201/2B cold-rolled coil was 8,000 yuan/mt; the average price for 304/2B cold-rolled mill-edge coil was 12,800 yuan/mt in Wuxi and 12,800 yuan/mt in Foshan; in Wuxi, the price for 316L/2B cold-rolled coil was 23,775 yuan/mt, and in Foshan it was 23,775 yuan/mt; the price for 316L/NO.1 hot-rolled coil in Wuxi was 23,000 yuan/mt; the price for 430/2B cold-rolled coil was 7,600 yuan/mt in both Wuxi and Foshan.

This week, the US Fed interest rate cut landed as expected, but as this positive had been largely digested by the market in advance, the boost to macro sentiment was limited. Although SS futures once surged, with the clear year-end policy stability tone, further stimulus expectations faded, and the upward momentum on the futures was noticeably insufficient, overall presenting a weak rebound pattern of retreat after rapid rise. The spot market performance was even softer. At the start of the week, only low-priced resources saw a slight increase in transactions, downstream players generally adopted a wait-and-see attitude, and restocking willingness was low. Traders reported persistently insufficient orders, and the year-end demand contraction trend is set. The supply-demand imbalance further intensified, with social inventory increasing slightly by 0.07% WoW to 947,600 mt, and destocking pressure becoming more apparent; while mainstream steel mills frequently announced production cuts for December, the actual reduction in the production schedule might only be 4.15%, and the implementation of production cuts fell far short of expectations. Under the pattern of strong supply and weak demand, actual transaction prices showed frequent hidden declines. Meanwhile, nickel pig iron and ferrochrome prices continued to decline, and cost support kept weakening. Overall, the current stainless steel market faces triple pressures: a vacuum in macro drivers, a fundamental supply-demand imbalance, and collapsing cost support. Although futures were briefly boosted by external factors, their own momentum is lacking. Short-term upward momentum is expected to be insufficient, and there remains some downside risk.