[SMM Stainless Steel Daily Review] Indonesian Nickel Mine News Boosts SHFE Nickel to Rise, Driving SS Higher; Spot Price Increases Lag, Premiums and Discounts Narrow

SMM December 22 news, SS futures showed a further strengthening and probing upward trend. Affected by last week's news that Indonesian nickel mine approvals might tighten, SHFE nickel continued its upward surge, and SS futures, driven by this, broke out of the previous trough, successively probing higher, once touching 12,855 yuan/mt during the session. In the spot market, driven by both the Indonesian nickel mine news and the surge in futures, spot stainless steel traders' offers saw some increases. Although there were inquiries in the market, the actual transaction finalization still needs follow-up, which limited further gains in spot prices, resulting in overall spot increases being weaker than the futures performance, and premiums/discounts narrowed.

The most-traded SS futures contract strengthened and probed higher. At 10:30 am, SS2602 was reported at 12,790 yuan/mt, up 125 yuan/mt from the previous trading day. Spot premiums/discounts for 304/2B in the Wuxi area were in the range of 180-380 yuan/mt. In the spot market, the average price for 201/2B cold-rolled coil in Wuxi was reported at 8,150 yuan/mt; the average price for 304/2B cold-rolled mill edge coil was 12,900 yuan/mt in Wuxi and 12,900 yuan/mt in Foshan; the price for 316L/2B cold-rolled coil in the Wuxi area was 24,000 yuan/mt, and 24,000 yuan/mt in the Foshan area; the price for 316L/NO.1 hot-rolled coil in Wuxi was reported at 23,100 yuan/mt; the price for 430/2B cold-rolled coil in both Wuxi and Foshan was 7,600 yuan/mt.

Recently, with the approaching change in the US Fed Chairman, and compounded by data gaps caused by the earlier US government shutdown, market concerns about uncertainty in the macro policy front intensified further. Although stainless steel futures were already at relatively low levels, they maintained a fluctuating trend at lows due to a lack of strong upward momentum. Affected by the low and fluctuating futures, spot market confidence was already insufficient, coupled with significant year-end off-season demand characteristics, downstream procurement was mostly just-in-time. However, news subsequently emerged that Indonesian nickel mine approvals might be reduced, quickly igniting market sentiment, driving both SHFE nickel and SS futures higher simultaneously, and spot prices followed suit. Recently, stainless steel mill production cuts and low arrivals, along with export policy adjustments bringing stainless steel products back under export license management effective January 1, 2026, prompted export enterprises to accelerate processing and cargo pick-up during the window before the policy takes effect, pushing existing inventory drawdown to accelerate, with social inventory down 2.21% WoW to 926,700 mt. On the raw material side, although high-grade NPI prices stopped rising and pulled back within the week, high-carbon ferrochrome prices strengthened, and the recent news about potential reductions in Indonesia's 2026 nickel ore quotas are expected to provide favorable support for future stainless steel costs.