Futures Weakness Drags Down Stainless Steel Scrap, Off-Season Demand Weakness Suppresses Market [SMM Stainless Steel Scrap Weekly Review]

Published: Jul 3, 2026 15:51

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[SMM Stainless Steel Scrap Market Weekly Review] Futures Weakness Dragged Down Stainless Steel Scrap Prices; Off-Season Demand Slump Pressured Market This week, prices of 304 stainless steel scrap off-cuts in east China pulled back, with a quotation range of 10,350-10,450 yuan/mt; prices of the same specification stainless steel scrap in the Foshan area fell in tandem, with a price range of 10,200-10,500 yuan/mt. From the perspective of raw material production cost analysis, the current cost to produce stainless steel entirely using stainless steel scrap is about 14,520.18 yuan/mt, while the cost using high-grade NPI reaches 14,988.98 yuan/mt, with the two maintaining a favorable cost spread. Stainless steel scrap prices pulled back slightly this week. During the week, SS futures consolidated weakly, and the weak sentiment in the futures market transmitted to the spot market, driving stainless steel finished product spot prices to also pull back slightly; the decline in the substitute raw material high-grade NPI slowed down, reducing its drag on the market, but the overall atmosphere in the raw material market remained mediocre. Under the influence of the futures-spot linkage, stainless steel scrap prices edged down slightly in tandem. Overall, cost support is difficult to offset the bearish pressure from fundamentals. The market has now entered the traditional consumption off-season for stainless steel, with end-use demand lacking internal momentum, and the expected production schedules of stainless steel mills pulling back, directly leading to a simultaneous weakening of rigid demand for stainless steel scrap. Meanwhile, news about the supplementary quota for Indonesian nickel ore remains unresolved, and policy uncertainty in the industry chain has been rising, leaving the overall market sentiment cautious and wait-and-see. Although stainless steel scrap still maintains a decent economic advantage over high-grade NPI, providing bottom support for prices, under the dual pressures of weak futures and the off-season…

This week, prices of 304 stainless steel scrap off-cuts in east China fell back, with a quotation range of 10,350-10,450 yuan/mt; prices for the same specification scrap in Foshan dropped in tandem, within a range of 10,200-10,500 yuan/mt. An analysis of raw material production costs shows that the current cost of producing stainless steel entirely using scrap is approximately 14,520.18 yuan/mt, while the cost using solely high-grade NPI reaches 14,988.98 yuan/mt, still maintaining a significant cost spread.

Stainless steel scrap prices pulled back slightly this week. During the week, SS futures remained in the doldrums and consolidated, with weak sentiment spilling over to the spot market and driving spot prices of stainless steel finished products to pull back slightly in tandem. Meanwhile, the decline of alternative raw material high-grade NPI slowed, reducing its drag on the market, but overall raw material sentiment remained mediocre. Affected by the correlation between futures and spot markets, stainless steel scrap prices edged down in tandem.

Overall, cost support is hard to offset the bearish pressures from fundamentals. The market has now entered the traditional consumption off-season for stainless steel, with end-use demand lacking intrinsic momentum and steel mills' expected production schedules pulling back, directly leading to weakening rigid demand for stainless steel scrap. Meanwhile, the unresolved issue of Indonesia's additional nickel ore quotas has heightened policy uncertainties in the industry chain, and the overall market sentiment leans cautious and wait-and-see. Although stainless steel scrap still maintains a good economic advantage over high-grade NPI, providing bottom support for prices, under the combined impact of weak futures, off-season demand pullback, and uncertain policy expectations, market trading sentiment remains cautious, making it difficult to reverse the weak market structure. In the short term, stainless steel scrap prices may continue to be in the doldrums.

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