[SMM Stainless Steel Daily Review] Positive News Supports Continued Rise in SS Futures, While Spot Stainless Steel Lacks Momentum for Price Increases, Premiums and Discounts Narrow

SMM, December 23: SS futures showed a further strengthening and probing rise trend. News of tightened Indonesian nickel ore approval procedures continued to ferment, driving SHFE nickel and SS futures to extend their previous gains and probe higher, with SS futures briefly touching 12,950 yuan/mt during the session. In the spot market, spurred by the continued surge in SS futures, market bullish sentiment was strong, and stainless steel spot traders continued to raise their offers in tandem. However, a major stainless steel mill in South China reopened with price increases falling short of expectations, coupled with insufficient actual high-priced transactions recently, limiting the upside in spot offers and causing spot premiums/discounts to narrow further.

The most-traded SS futures contract strengthened and probed higher. At 10:30 am, the SS2602 contract was quoted at 12,920 yuan/mt, up 130 yuan/mt from the previous trading day. In Wuxi, the spot premium/discount for 304/2B was in the range of 100-350 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was reported at 8,150 yuan/mt; the average price for cold-rolled mill-edge 304/2B coil was 12,975 yuan/mt in Wuxi and 12,950 yuan/mt in Foshan; the price for cold-rolled 316L/2B coil was 24,000 yuan/mt in Wuxi and 24,000 yuan/mt in Foshan; the price for hot-rolled 316L/NO.1 coil was reported at 23,100 yuan/mt in Wuxi; the price for cold-rolled 430/2B coil was 7,600 yuan/mt in both Wuxi and Foshan.

Recently, as the transition of the US Fed Chairman approaches, compounded by data gaps caused by the earlier US government shutdown, market concerns about uncertainty in the macro policy landscape have 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 weak, and with significant year-end off-season demand characteristics, downstream buyers primarily engaged in just-in-time procurement. However, news subsequently emerged that Indonesian nickel ore approvals might be reduced, quickly igniting market sentiment and driving SHFE nickel and SS futures higher in sync, with spot prices also following the rise. Recently, stainless steel mills implemented production cuts, arrivals were relatively low, and simultaneously, export policy adjustments have reinstated stainless steel products into the export licensing management scope, effective January 1, 2026. Export enterprises are accelerating processing and cargo pick-up to complete operations before the policy takes effect during the window period, pushing the destocking pace of existing inventory to accelerate. Social inventory fell 2.21% WoW this week 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 somewhat. Furthermore, recent news about potential reductions in Indonesia's 2026 nickel ore quotas is expected to provide favorable support for future stainless steel costs.