Finished steel price declines follow suit, stainless steel mill profits slightly compressed [SMM Analysis]

Published: Jun 26, 2026 15:30

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[SMM Analysis] Finished Product Prices Fall in Tandem, Stainless Steel Mill Profits Slightly Compressed This week, stainless steel prices and production costs declined in tandem, with steel mill profit margins narrowing slightly. Using 304 cold-rolling as the assessment basis, the profit margin calculated with current raw material costs stood at 2.28%, while that based on inventory raw materials was 2.1%. On the nickel-based raw material cost side, high-grade NPI prices showed a downward pullback this week. Affected by weakening SHFE nickel and SS futures, coupled with disturbances from Indonesian nickel ore news, although NPI producers and traders maintained a strong willingness to hold prices firm, expectations of off-season maintenance and production cuts at stainless steel mills and the pullback in stainless steel prices led to low acceptance of high-priced raw materials, driving high-grade NPI prices to decline and pull back. As of this Friday, high-grade NPI with a mainstream grade of 10%-12% fell by 8.5 yuan per nickel unit, closing at 1,141 yuan per nickel unit. In the stainless steel scrap market, prices fell in tandem this week. SS futures pulled back and stainless steel finished product prices declined, dragging down stainless steel scrap. Currently in the traditional consumption off-season, end-use demand is weak, and expectations of lower steel scrap demand due to mill production cuts and maintenance, along with bearish macro sentiment, led to more cautious purchasing attitudes. Although stainless steel scrap holds an economic advantage over NPI and finds some bottom support, it is struggling to withstand the combined weight of multiple bearish factors, and the short-term market remains under pressure. As of this Friday, mainstream 304 off-cuts in Shanghai fell by 50 yuan/mt, with the latest quotation at approximately 10,500 yuan/mt. On the chrome-based raw material cost side, high-carbon ferrochrome prices continued to edge down this week. This week, TISCO and Tsingshan successively...

This week, stainless steel prices trended downward alongside production costs, slightly narrowing profit margins at steel mills. Based on 304 cold-rolled coil calculations, the current raw material-based profit margin stood at 2.28%, while the inventory raw material-based profit margin registered at 2.1%.

On the nickel-based raw material cost side, high-grade NPI prices pulled back this week. Downward movements in SHFE nickel and SS futures, combined with disturbances from news regarding Indonesian nickel ore, pushed down high-grade NPI prices. This occurred despite still-strong willingness at NPI producers and traders to hold prices firm, as expectations for off-season maintenance-driven production cuts at stainless steel mills and the decline in stainless steel prices limited their acceptance of high-priced raw materials. As of this Friday, mainstream high-grade NPI with 10%-12% metal content had edged down by 8.5 yuan per nickel unit, closing at 1,141 yuan per nickel unit.

In the stainless steel scrap market, prices moved down this week in tandem with declines in SS futures and finished stainless steel products, which dragged down scrap stainless steel. Currently in the traditional consumption off-season, end-use demand is sluggish. Coupled with expectations for lower steel scrap demand due to mill production cuts and maintenance, alongside bearish macro sentiment, buying attitudes in the market are turning increasingly cautious. Although the economic advantage of scrap stainless steel over NPI provided certain bottom support, it could not withstand the combined impact of multiple bearish factors, leaving the short-term market under pressure. As of this Friday, mainstream 304 off-cuts prices in the Shanghai region fell by 50 yuan/mt to a latest quotation of around 10,500 yuan/mt.

On the chrome-based raw material cost side, high-carbon ferrochrome prices continued to edge down this week. Tsingshan and TISCO successively announced their steel mill tender prices for high-carbon ferrochrome in July, down 200 yuan/mt (50% metal content) from June, which was largely in line with earlier market expectations. Under current off-season expectations, expectations for stainless steel production cuts are heating up, while ferrochrome supply remains at relatively high levels. Additionally, high inventory at chrome ore ports is fueling strong market pessimism, with expectations that high-carbon ferrochrome prices will remain in the doldrums in the near term. As of this Friday, prices of mainstream high-carbon ferrochrome in Inner Mongolia fell 75 yuan/mt (50% metal content) WoW, settling at 8,150 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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