[SMM Analysis] Pre-Holiday Stockpiling Fizzles? Stainless Steel Inventory Sees Slight Accumulation

SMM reported on January 22 that this week (January 16-22, 2026), the total inventory of the two major stainless steel markets in Wuxi and Foshan showed a slight inventory buildup trend, increasing from 843,700 mt on January 15, 2026 to 844,100 mt on January 22, 2026, up 0.05% WoW.

This week, the social inventory of stainless steel continued to accumulate slightly with a relatively limited increase. The core issue behind the small rise in inventory was the further highlighted supply-demand imbalance between the strengthened futures pushing up prices and the weak end-use demand, leading to poor cargo circulation. During the week, the futures continued to surge, reaching a new high since June 2024, boosting market sentiment, and the spot stainless steel prices also rose accordingly. The downstream end-use market showed significant fear of high prices, and the purchasing attitude was particularly cautious. Coupled with the early depletion of January's market demand due to enterprises rushing to export during the policy window period, even as the Chinese New Year holiday approached, the traditional pre-holiday stockpiling did not effectively start, and the actual purchasing willingness at the terminal remained low. Observing the market transaction structure, recent purchase activities mainly concentrated on the arbitrage operations of trading firms engaging in both spot and futures market, with most of the goods stagnating in the circulation stage, failing to truly enter the end-use consumption area, lacking core demand support for inventory reduction.

This week, the overall arrivals at steel mills were relatively low, and the supply-side replenishment was limited, which should have restrained the inventory. However, due to the weak end-use demand and the obstruction of cargo circulation, the social inventory of stainless steel still accumulated slightly. Although the strong performance of the futures in the short term provided some support to the market price, the insufficient terminal uptake and the ongoing problem of early demand depletion made the "price rise with weak volume" situation particularly prominent. In the short term, as the Chinese New Year holiday approaches, whether the terminal stockpiling willingness can marginally improve remains uncertain, while the concerns over stagnant goods and weak demand may continue to dominate the inventory changes.