Futures Drive Up Stainless Steel Spot Prices, Raw Material Inventory Profits Recover [SMM Analysis]

Published: Jan 9, 2026 16:20

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This week, stainless steel spot prices rose in tandem with production costs, narrowing losses for steel mills. Taking 304 cold-rolled products as an example, based on the current raw material prices, the full cost loss ratio reached 3.14% this week; when calculated using raw material inventory costs, the full cost profit margin stood at 7.39%.

Nickel-based raw material costs, high-grade NPI prices continued their upward trend amid a further sharp rise in SHFE nickel futures. However, on Thursday, uncertainty reemerged regarding the approval of Indonesian nickel mining quotas, leading to a pullback in futures. Additionally, high-priced transactions were mainly concentrated in the trading sector, with steel mills showing limited acceptance of high prices, creating resistance to further increases in high-grade NPI prices. As of Friday, the price of high-grade NPI with 10-12% grade increased by 39.5 yuan per mtu, closing at 962 yuan/mtu. In the stainless steel scrap market, stainless steel finished product spot prices continued to rise overall, with furnace charges such as high-grade NPI and high-carbon ferrochrome also strengthening, leading to significant bullish sentiment in the stainless steel scrap market. Coupled with already low stainless steel scrap inventories and its continued cost advantage over high-grade NPI, stainless steel scrap prices strengthened further during the week. As of Friday, the price of 304 off-cuts in east China rose by 200 yuan/mt, with the latest offer around 9,500 yuan/mt.

Chrome-based raw material costs, high-carbon ferrochrome prices stopped falling and moved higher this week. Although domestic high-carbon ferrochrome production remains high, imports are low due to overseas production halts, leaving retail ferrochrome supply in the domestic market tight. Additionally, recent increases in chrome ore export taxes in Zimbabwe and rising quotes for South African ore have strengthened cost support for ferrochrome. Boosted by the recent rise in stainless steel prices, market sentiment improved, leading ferrochrome producers to raise their offers. As of Friday, the price of high-carbon ferrochrome in Inner Mongolia increased by 150 yuan/mt (50% metal content) WoW, closing at 820 yuan/mt (50% metal content).

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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