[SMM Stainless Steel Daily Review] SS futures edged up slightly, stainless steel spot prices recovered moderately, trading volume was acceptable.

SMM reported on December 18 that SS futures showed a pattern of holding up well with rangebound fluctuations. SHFE nickel strengthened further driven by news about Indonesian nickel mines, and SS futures generally fluctuated upward, with the intraday high reaching 12,435 yuan/mt. In the spot market, boosted by the rise in futures, market confidence recovered somewhat, and traders raised their offers. Although acceptance of high prices was limited, low-price transactions during the day were moderate. This week, social inventory accumulated, down 2.21% WoW to 926,700 mt.

The most-traded SS futures contract fluctuated upward. At 10:30 a.m., the SS2602 contract was quoted at 12,390 yuan/mt, up 45 yuan/mt from the previous trading day. In Wuxi, the spot premiums/discounts for 304/2B were in the range of 330-530 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 mill edge 304/2B coil, the average price in Wuxi was 12,650 yuan/mt, and in Foshan it was 12,650 yuan/mt; for cold-rolled 316L/2B coil in Wuxi, the price was 23,775 yuan/mt, and in Foshan it 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, the price in both Wuxi and Foshan was 7,600 yuan/mt.

Recently, approaching the change of the US Fed Chairman and data gaps caused by the earlier US government shutdown, market concerns about uncertainty in macro policy have increased further. Although stainless steel futures have reached relatively low levels, they lack strong upward momentum and have been fluctuating at lows. In the spot market, confidence was already weak due to the low, rangebound futures, compounded by the obvious off-season demand at year-end, with downstream users mostly maintaining just-in-time procurement. However, recently, due to production cuts at stainless steel mills, low arrivals, and the recent adjustment of export policies which reincluded stainless steel products in the scope of export license management, effective January 1, 2026, export enterprises are accelerating processing and cargo pick-up to complete operations within the window before the policy takes effect, speeding up the destocking of existing inventory. Social inventory fell slightly by 2.21% WoW this week to 926,700 mt. On the raw material side, although high-grade NPI stopped rising and pulled back within the week, high-carbon ferrochrome prices strengthened, and recent news about reduced nickel ore quotas in Indonesia for 2026 is expected to provide favorable cost support for stainless steel in the future. Overall, with year-end macro tailwind policies largely realized and limited upward price momentum under pressure from weak demand, the short-term pattern of low, rangebound fluctuations is difficult to change.