[SMM Analysis] Rising Cost Center Drives Futures to Rise Sharply, Spot Cargo Trading Faces Resistance at High Levels [SMM Stainless Steel Futures Weekly Review]

SMM data shows that this week (January 12-16, 2026), the most-traded stainless steel futures contract (SS2603) continued and accelerated its upward trend from last week, presenting a significant "cost-driven" rally. As of 10:30 on January 16, the contract price broke through the 14,000 yuan/mt level, rising to 14,405 yuan/mt, up 610 yuan/mt (+4.42%) from the closing price of 13,795 yuan/mt on the previous Friday. The rise in prices this week was mainly driven by a substantial increase in the cost side and a resonance with macro liquidity easing. High-grade NPI prices breaking through the 1,000 yuan mark fundamentally lifted the valuation center of stainless steel, coupled with the central bank's large-scale buyout-style reverse repo operations to inject liquidity, leading to active capital inflows into the sector and pushing the futures center to new highs recently.

From a macro perspective, bullish and bearish factors are intertwined, with cooling inflation and ample liquidity forming the main backdrop. Overseas, the US December core CPI YoY recorded 2.6%, slightly below market expectations of 2.7%. Although housing costs remained sticky, the trend of price increases slowing towards the 2% target boosted market confidence. The US Fed maintained a wait-and-see stance, with the logic of cooling inflation unchanged. Geopolitically, heightened expectations of US-EU sanctions on Iran have, to some extent, pushed up the risk premium for global commodities. Domestically, the central bank conducted 900 billion yuan worth of six-month buyout-style reverse repo operations, injecting long-term liquidity into the market and effectively boosting sentiment in the commodity market. Despite the exchange raising the margin ratio for financing to 100% to guard against stock market risks, under the support of ample liquidity in the banking system, commodity futures remained active.

Fundamentally, although inventory continues to decline, terminal demand has not met expectations, and the high-price suppression effect is gradually becoming apparent. SMM's latest data shows that social inventory fell to 843,000 mt this week, down from 854,000 mt last week, indicating no immediate pressure for inventory buildup. However, spot trading sentiment fluctuated significantly. At the beginning of the week, market transactions were mediocre, with many downstream players adopting a wait-and-see attitude. By Wednesday, as market sentiment improved, there was a brief recovery, with active spot orders and moderate trading of low-priced resources. But as the futures price rose further on Thursday, speculative and just-in-time procurement cooled down rapidly after the spot price followed, with the market reporting resistance to high-level transactions. Currently, downstream acceptance of resources priced above 14,000 yuan/mt is limited, with most end-users maintaining a purchase-as-needed strategy, and restocking willingness slowing, with fear of high prices increasing.

The significant rise in the cost side was the key support for this week's market, while policy disruptions in the Indonesian ore sector were the core driver behind the surge in raw material prices. On the news front, on January 14, 2026, Tri Winarno, Director General of Indonesia's Ministry of Energy and Mineral Resources (ESDM), told the media that this year's nickel ore production quota (RKAB) is expected to be strategically adjusted to 250 million to 260 million mt. Although ESDM has allowed the existing quotas to be extended until March 31, 2026, to ensure production continuity during the review period, the actual supply for the whole year still depends on the government's later assessment and additional quota allocations. This policy-level uncertainty has intensified market concerns over a future contraction in raw material supply, directly driving up raw material prices. SMM data shows that as of January 16, high-grade NPI prices have broken through the 1,000 yuan threshold, rising to 1,017.5 yuan/mtu, an increase of more than 50 yuan WoW; high-carbon ferrochrome also rose to 8,425 yuan/mt (50% metal content). The rise in the cost side significantly raised the bottom line of steel mills' production costs, limiting the space for futures to retreat, and forcing steel mills to raise guidance prices.

Overall, the stainless steel market this week presented a pattern of "strong cost-side drive, active capital game, and high-pressure spot end." The uncertainty of Indonesia's RKAB quota and the NPI price breaking 1,000 yuan indicate a significant upward shift in the cost support line, providing strong short-term price support. However, the rapid increase in futures prices has led to an expansion of the spot-futures price spread, with the risk of negative feedback accumulating due to insufficient purchase willingness at high prices. Looking ahead to next week, as futures stabilize above 14,400, the market will enter a high-level game phase, requiring vigilance against profit-taking and the pressure from weakening spot transactions. It is expected that futures will maintain considerable fluctuations at high levels, awaiting follow-up in spot demand or further guidance from raw material prices.