[SMM Analysis] Futures surge drives spot cargo rise, stainless steel inventory declines, end-user reluctance emerges amid high prices.

SMM January 8 - This week (January 1-8, 2026), the total inventory of the two major stainless steel markets in Wuxi and Foshan showed a declining trend, falling from 872,600 mt on December 31, 2025 to 854,600 mt on January 8, 2026, down 2.06% WoW.

This week, social inventory of stainless steel moved lower. Recently, armed conflict broke out between the US and Venezuela, driving up international asset hedging demand and pushing metal futures significantly higher. Following this, SS futures also surged, hitting limit-up at one point and reaching highs since 2025. Overall market sentiment remained strong, and spot prices also rose in response. Influenced by the market psychology of "rushing to buy amid continuous price rise and holding back amid price downturn," coupled with the accelerated fulfillment of previously low-priced contracts after the price increase, the satisfaction of earlier restocking demand, and the crowding-out effect of the export rush before the implementation of the New Year's Day export policy, inquiries and transactions in the stainless steel market were relatively active during the week. However, as stainless steel prices continued to climb, fear of high prices gradually increased among downstream end-users. Additionally, market expectations for the extent of tightening in Indonesian nickel ore approvals slowed down, leading to significant volatility in futures. Moreover, as the market is still in the traditional consumption off-season and stainless steel mills' expected production schedule for January still shows an increase, there is a considerable risk of a pullback in the subsequent market.