[SMM Stainless Steel Daily Review] Year-End Futures Lead Stainless Steel Spot Cargo to Strengthen, Market Confidence Recovery Expectations Drive Production Schedule Higher

SMM December 31 — SS futures held up well. On the last trading day of 2025, SHFE nickel futures continued to test higher, driving SS futures further upward, with the most-traded contract settling at 13,125 yuan/mt. In the spot market, recent positive news supported SS futures' strength and upward momentum, boosting confidence in the stainless steel spot market. Combined with rising nickel-iron and stainless steel scrap prices, cost-side support strengthened, spot traders grew more bullish, some agents suspended offers, and spot quotations moved higher. Although downstream acceptance of high-priced material remained moderate, transactions improved compared to earlier periods due to trader discounts, easing market pressure.

The most-traded SS futures contract held up well. At 10:30 a.m., SS2602 was quoted at 13,095 yuan/mt, up 35 yuan/mt from the previous trading day. In Wuxi, spot premiums/discounts for 304/2B were in the range of 25–275 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was 8,200 yuan/mt; for cold-rolled trimmed 304/2B coil, the average price was 13,075 yuan/mt in both Wuxi and Foshan; cold-rolled 316L/2B coil was 24,400 yuan/mt in Wuxi and Foshan; hot-rolled 316L/NO.1 coil was quoted at 23,600 yuan/mt in Wuxi; cold-rolled 430/2B coil was 7,600 yuan/mt in both Wuxi and Foshan.

Driven by news related to Indonesian nickel ore, stainless steel futures ended their previous downtrend, with SHFE nickel and SS futures rising rapidly. On the spot side, although stainless steel remained in the traditional consumption off-season at year-end with sluggish end-use demand, spot prices rose in tandem with the stronger futures. Downstream buyers still found high-priced material hard to accept, but with traders offering slight discounts, overall recent transactions were moderate. Recently, social inventory of stainless steel saw notable destocking; as of December 25, total social inventory fell to 892,400 mt. Recent price increases have restored profitability for steel mills in terms of raw material inventory costs. Combined with previous consecutive production cuts and lower inventory, mills face reduced sales pressure and show stronger production willingness, with January output expected to increase slightly. In addition, stainless steel products have been reinstated under export licensing management, with policies requiring "one license per shipment" and a license validity of three months. Future exports may be restricted; recently, driven by the export window rush, the number of purchase orders increased, but this is likely to borrow from January's export demand. Cost side, nickel-iron prices continued to climb amid nickel ore news and expectations of tight supply; high-carbon ferrochrome prices saw relatively small declines; stainless steel scrap prices rose alongside stainless steel spot and nickel-iron. Stainless steel costs continue to show an upward trend, with the cost support effect strengthening. Currently, the stainless steel market exhibits a pattern where futures drive spot cargo. The year-end off-season consumption situation has not shown significant improvement. Recent price increases have been largely influenced by market news, with the futures market experiencing a strong rebound and gains. Coupled with robust cost support and continuously declining inventory, stainless steel spot prices have followed suit and risen. However, there remains a certain risk of a pullback in the market.