[SMM Stainless Steel Daily Review] SS Futures Halted Declines and Recovered, While Weak Fundamentals Kept Stainless Steel Spot Prices Trading at Low Levels

SMM December 17 - SS futures showed a rebound trend. Last night, the US released non-farm payroll and unemployment data. Today, metal futures collectively rebounded, with SS following the upward trend and breaking through 12,400 yuan/mt. In the spot market, although SS futures prices were low at the morning opening and spot market quotes remained at low levels, spot quotes also rebounded as futures recovered. With the rebound in SS futures, market confidence was boosted, and low-price transactions during the day were moderate.

The most-traded SS futures contract stopped falling and rebounded. At 10:30 a.m., SS2602 was quoted at 12,345 yuan/mt, up 5 yuan/mt from the previous trading day. In Wuxi, the spot premium/discount for 304/2B was in the range of 325-525 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was 8,100 yuan/mt; for cold-rolled trimmed 304/2B coil, the average price in Wuxi was 12,600 yuan/mt, and in Foshan was 12,600 yuan/mt; for cold-rolled 316L/2B coil in Wuxi, the price was 23,775 yuan/mt, and in Foshan was 23,775 yuan/mt; for hot-rolled 316L/NO.1 coil in Wuxi, the price was 23,000 yuan/mt; for cold-rolled 430/2B coil in both Wuxi and Foshan, the price was 7,600 yuan/mt.

This week, the US Fed interest rate cut landed as expected, but as the positive factor had already been priced in by the market, the boost from 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, overall showing a weak rebound pattern of retreating after a rapid rise. The spot market performance was even weaker. At the beginning of the week, only low-priced resources saw a slight increase in transactions, with downstream players generally adopting a wait-and-see attitude and restocking willingness remaining low. Traders reported persistent 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, and destocking pressure becoming more evident. Although mainstream steel mills frequently announced planned production cuts for December, the actual production schedule reduction may only be 4.15%, far below expectations. Under the pattern of strong supply and weak demand, actual transaction prices frequently showed hidden declines. Meanwhile, nickel pig iron and ferrochrome prices continued to decline, with cost support persistently 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 driven by external factors, their own momentum is lacking. Short-term upward momentum is expected to remain insufficient, with certain downside risks still present.