[SMM Stainless Steel Daily Review] SHFE Nickel Drives SS Futures to Stop Rising and Pull Back, Cautious Wait-and-See Sentiment Emerges in Stainless Steel Spot Market

SMM, December 25 - SS futures stopped rising and pulled back. Driven by a significant decline in SHFE nickel, SS futures also fell, once dropping to 12,870 yuan/mt during the session. Spot market, affected by the sharp futures pullback, market sentiment weakened again. Downstream end-users had limited acceptance of high prices, and cautious wait-and-see sentiment intensified. Although stainless steel spot traders lowered their offers, transactions remained sluggish throughout the day. Social inventory fell 3.7% WoW to 892,400 mt this week.

The most-traded SS futures contract declined. At 10:30 a.m., SS2602 was quoted at 12,935 yuan/mt, down 165 yuan/mt from the previous trading day. In Wuxi, the spot premium/discount for 304/2B was in the range of 135-435 yuan/mt. In the spot market, the average price of Wuxi cold-rolled 201/2B coil was 8,200 yuan/mt; the average price of cold-rolled mill edge 304/2B coil was 13,050 yuan/mt in Wuxi and 13,025 yuan/mt in Foshan; the price of cold-rolled 316L/2B coil was 24,050 yuan/mt in Wuxi and 24,050 yuan/mt in Foshan; the price of hot-rolled 316L/NO.1 coil was 23,250 yuan/mt in Wuxi; the price of cold-rolled 430/2B coil was 7,600 yuan/mt in both Wuxi and Foshan.

Recently, as the US Fed Chairman transition approaches, coupled with data gaps caused by the earlier US government shutdown, market concerns about macroeconomic policy uncertainty intensified. 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-level fluctuations in futures, spot market confidence was already weak, and with significant year-end off-season characteristics, downstream mostly engaged in just-in-time procurement. However, news later emerged about potential reductions in Indonesian nickel ore approvals, quickly igniting market sentiment and driving SHFE nickel and SS futures higher, with spot prices following the rise. Recently, stainless steel mills implemented production cuts, arrivals were low, and export policy adjustments brought stainless steel products back under the export license management scope, effective January 1, 2026. Export enterprises rushed to complete operations before the policy takes effect, accelerating processing and cargo pick-up, which sped up inventory drawdowns. Social inventory fell 2.21% WoW to 926,700 mt during the week. Raw material side, although high-grade NPI prices stopped rising and pulled back during the week, high-carbon ferrochrome prices strengthened. The recent news about reduced Indonesian nickel ore quotas for 6 is expected to provide favorable support for future stainless steel costs.