[SMM Stainless Steel Daily Review] SS Futures Moved Sideways, Spot Stainless Steel Traded Mediocrely and Struggled to Rise

SMM April 9 reported that SS futures continued to move sideways in a narrow range. The US and Iran temporarily ceased fire, but geopolitical conflicts had not truly subsided, and uncertainty at the macro perspective remained elevated. SS futures failed to sustain the previous upward momentum and largely moved sideways, closing at 14,320 yuan/mt as of the midday session. In the spot market, as the futures rally paused, the stainless steel spot market still saw some inquiry activity, but actual transactions were mainly driven by low-priced sources; traders attempted to slightly raise their offers, but actual transaction gains were limited.

The most-traded SS futures contract moved sideways in a narrow range. At 10:15 AM, SS2605 was quoted at 14,290 yuan/mt, up 25 yuan/mt from the previous trading day. Spot premiums for 304/2B in the Wuxi area ranged from 180-380 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi fell by 100 yuan/mt; for cold-rolled untrimmed 304/2B coils, the Wuxi average price rose by 50 yuan/mt while the Foshan average price remained stable; cold-rolled 316L/2B coils in the Wuxi area dropped by 200 yuan/mt; hot-rolled 316L/NO.1 coils were quoted flat in Wuxi; cold-rolled 430/2B coils in both Wuxi and Foshan remained stable.

The stainless steel market is currently in the traditional peak consumption season of "Golden March and Silver April," with downstream demand recovering compared to the earlier period. End-user procurement continued at a rigid-demand pace, and overall trading volume was sufficient to sustain basic market vitality. However, affected by macro news disturbances and futures fluctuations, downstream end-user clients maintained a wait-and-see sentiment, showing no willingness to stockpile, and transactions fluctuated with changes in news. Futures side, although the US-Iran conflict temporarily ceased fire, geopolitical conflict risks remained elevated, cautious sentiment persisted in the market, and SS futures saw limited gains, failing to effectively drive the spot market. Supply and inventory side, steel mills' April production schedules for stainless steel remained at relatively high levels, with the high-supply pattern unchanged, putting certain digestion pressure on the market; coupled with month-end concentrated distribution of goods from steel mills to the market, although downstream demand continued to provide rigid-demand support, stainless steel social inventory rose this week, but the increase was limited. Currently, steel mills mainly focused on stabilizing prices for shipments to ease inventory and supply pressure. Cost side, nickel ore prices remained firm, leaving limited room for nickel pig iron price compression; however, stainless steel mills were already on the verge of cost losses, with low acceptance of high-priced raw materials. The tug-of-war between upstream and downstream continued, keeping stainless steel production costs relatively stable. Earlier market expectations of cost support for stainless steel prices had gradually dissipated. Overall, the core contradiction in the stainless steel market this week lay in the mismatch between high supply and steady yet cautious demand. Although the "Golden March and Silver April" peak season supported the downstream demand base, and cost factors also limited the downside for stainless steel prices to some extent, strong wait-and-see sentiment among downstream players, significant transaction disturbances from news, and persistent macro uncertainty remained. Based on comprehensive analysis, whether stainless steel prices can strengthen and move higher going forward still depends on further impetus from the macro news front.