[SMM Stainless Steel Daily Review] Indonesia’s Export Taxation Is Unlikely to Halt the Downtrend in SS; Stainless Steel Spot Prices Remained Stable, with Transactions Mainly Driven by Rigid Demand

SMM reported on March 31 that SS futures continued to fall and pull back. Although news emerged about export taxes on Indonesian nickel products, dragged down by weaker SHFE nickel today, SS futures also moved lower and closed at 14,145 yuan/mt as of the midday close. In the spot market, although SS futures declined, the stainless steel spot market remained generally stable, with most traders keeping quotes steady, while downstream end-users mainly maintained stable procurement for rigid demand.

The most-traded SS futures contract fluctuated. At 10:15 a.m., SS2605 was quoted at 14,365 yuan/mt, down 165 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi stood in the 270-470 yuan/mt range. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi was unchanged; for cold-rolled burr-edge 304/2B coils, the average prices in both Wuxi and Foshan held steady; cold-rolled 316L/2B coils in Wuxi were unchanged; hot-rolled 316L/NO.1 coils in Wuxi were quoted flat; and cold-rolled 430/2B coils in both Wuxi and Foshan remained stable.

The stainless steel market has now entered the traditional peak consumption season. Transactions among downstream end-users remained stable, but market sentiment turned cautious. End-user enterprises showed little willingness to stockpile, with procurement mainly driven by restocking as needed, and the brisk trading pattern typically seen in the peak season has yet to emerge, leaving overall demand stable and neutral. On the futures side, repeated disruptions from the Iran geopolitical conflict made its short-term impact on SS futures difficult to fully eliminate. However, supported by expectations that the conflict may ease, together with stimulus from news related to Indonesian nickel product export tariffs and windfall taxes, SS futures held up well this week, but still failed to break out of the previous sideways movement range, with no clear breakout direction in the market. Supply and inventory side, stainless steel mills still maintained relatively high production schedules in the short term, and the high supply pattern remained unchanged. Coupled with relatively high recent arrivals, although downstream transactions stayed stable, end-users lacked willingness to stockpile, and stainless steel social inventory posted another slight inventory buildup this week. Pressure to digest market inventory remained heavy, which not only constrained the market to some extent, but also tested the pace of steel mill shipments. Cost side, recent gains in SHFE nickel prices pushed high-grade NPI quotes somewhat higher, but stainless steel mills themselves faced significant cost pressure, and the economic advantage of stainless steel scrap became more prominent. Mills showed low acceptance of high-priced NPI and maintained an overall cautious procurement stance. As a result, stainless steel production costs remained broadly stable without obvious fluctuations. Overall, the core contradiction in the stainless steel market this week lay in the mismatch among high supply, elevated inventory, and stable demand. Although the cost side provided some support, it was insufficient to drive finished steel prices higher. In addition, macro news remained highly uncertain, and overall market sentiment stayed cautious. Stainless steel prices are expected to mainly move sideways in the short term.