Stainless steel costs and prices rise in sync, stainless steel mill profits recover [SMM analysis]

Published: Jan 16, 2026 17:01

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This week, stainless steel spot prices and production costs rose in tandem, improving steel mills' profitability. Taking 304 cold-rolled products as an example, based on the raw material prices of the day, the full cost profit margin rebounded to 0.13% this week; when calculated using raw material inventory costs, it reached 6.28%.

Nickel-based raw material costs: Stimulated by news of Indonesian nickel mine approvals, SHFE nickel futures rose sharply further this week, and high-grade NPI prices continued their previous upward trend, currently at high levels. Stainless steel mills have limited acceptance of high-priced raw materials, but market sentiment is optimistic, making a short-term reversal of the upward trend difficult. The continued strength in high-grade NPI prices is also pushing market expectations gradually higher. As of Friday this week, high-grade NPI with 10-12% grade rose by 55.5 yuan per mtu, settling at 1,017.5 yuan/mtu. Stainless steel scrap market: Stainless steel finished product spot prices generally continued their upward trend, with furnace charges like high-grade NPI and high-carbon ferrochrome also strengthening simultaneously, causing bullish sentiment in the stainless steel scrap market to continue heating up. Combined with already low stainless steel scrap inventory and its better economic advantage compared to high-grade NPI, stainless steel scrap prices climbed further within the week. As of Friday this week, 304 off-cuts in east China rose by 250 yuan/mt, with the latest offer around 9,750 yuan/mt.

Chromium-based raw material costs: This week, high-carbon ferrochrome prices continued to strengthen and climb. Glencore's new round of overseas market offer for South African chrome concentrate ore (40-42% grade) was further raised to $280/mt, driving the domestic chrome ore market to strengthen in sync. Additionally, recent high operating rates at ferrochrome producers and a slight pullback in chrome ore port inventory have enhanced support for ferrochrome costs. Meanwhile, continuously rising stainless steel prices significantly boosted sentiment in the ferrochrome market, with producers strongly willing to hold prices firm. As of Friday this week, high-carbon ferrochrome prices in Inner Mongolia rose by 175 yuan/mt (50% metal content) WoW, settling at 8,425 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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