Raw Material Linkage Drives Scrap to Edge Up; Off-Season Restrains Market Gains [SMM Stainless Steel Scrap Weekly Review]

Published: Jun 5, 2026 15:53

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[SMM Stainless Steel Scrap Weekly Review] Scrap Edges Up on Raw Material Linkage, Off-Season Constraints Cap Gains This week, the price of 304 stainless steel scrap off-cuts in east China edged up, with a quotation range of 10,400-10,500 yuan/mt. In the Foshan area, off-cuts of the same specification moved higher in tandem, trading in a range of 10,300-10,600 yuan/mt. From a raw material cost analysis perspective, the current production cost of stainless steel using 100% stainless steel scrap is approximately 14,580.48 yuan/mt, while the cost using only high-grade NPI stands at 15,153.78 yuan/mt, maintaining a significant cost spread between the two. Stainless steel scrap prices edged up this week. During the week, SS futures retreated after a rapid rise overall, while spot stainless steel prices fluctuated narrowly and held firm overall, providing a stable foundation for the stainless steel scrap market. Meanwhile, the alternative raw material high-grade NPI market continued to hold up well, with prices edging higher. The positive overall sentiment in the raw material segment spurred stainless steel scrap prices to rise in tandem. However, the market has now entered the traditional consumption off-season for stainless steel, with weak downstream end-use demand. Coupled with production cuts and maintenance at domestic steel mills, raw material demand expectations have weakened somewhat. The industry-wide issue of tight tax invoices has yet to be effectively resolved, continuing to constrain market trading activity. At the same time, recent grade degradation issues in high-grade NPI require steel mills to supplement nickel content with high grade nickel products, and combined with limitations in their production processes, it remains difficult for steel mills to significantly increase their use of stainless steel scrap. Although stainless steel scrap retains a favorable cost advantage over high-grade NPI, multiple bearish off-season factors on...

This week, stainless steel scrap off-cut prices in east China edged up, with a quotation range of 10,400-10,500 yuan/mt. Prices for the same specification in the Foshan area rose in tandem, with a price range of 10,300-10,600 yuan/mt. From a raw material cost perspective, the production cost for stainless steel using entirely stainless steel scrap stands at approximately 14,580.48 yuan/mt, while the cost using entirely high-grade NPI reaches 15,153.78 yuan/mt, maintaining a notable cost spread between the two.

Stainless steel scrap prices edged up this week. SS futures retreated after a rapid rise during the week, while spot stainless steel prices fluctuated relatively little and held up well, providing a stable foundation for the stainless steel scrap market. Meanwhile, the alternative raw material high-grade NPI market continued to hold up well, with prices ticking up slightly. The overall positive sentiment on the raw material side drove stainless steel scrap prices up in tandem. However, the market has now entered the traditional consumption off-season for stainless steel, with weak downstream end-use demand. Coupled with production cuts and maintenance at China’s steel mills, raw material demand expectations weakened somewhat. The unresolved issue of tight industry tax invoices continued to constrain market trading activity. At the same time, recent grade slippage in high-grade NPI required steel mills to supplement nickel content with high-grade nickel products. Combined with production process limitations, this made it difficult for stainless steel mills to significantly increase their use of stainless steel scrap. Although stainless steel scrap maintained a strong cost advantage over high-grade NPI, multiple bearish factors during the off-season offset the upward momentum, limiting upside room for prices. Overall, the stainless steel scrap market this week presented a slight uptrend characterized by “fluctuating futures, steady spots, raw material linkage, and off-season pressure.” The strong performance of NPI lifted scrap prices modestly, but weak off-season demand, tax invoice constraints, and process limitations suppressed the extent of the gains. In the short term, bullish and bearish factors are at an impasse, and subsequent stainless steel scrap prices are expected to hold steady.

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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