[SMM Stainless Steel Daily Review] Stainless Steel SS Moves Sideways Under Pressure, Off-Season Weak Demand, Spot Stainless Steel Steady, Sentiment Pessimistic

According to SMM on July 13, SS futures moved sideways. Nonferrous metals futures broadly maintained a subdued consolidation pattern. SS extended its earlier weak performance, with limited overall fluctuations. As of the midday close, the most-traded SS contract settled at 14,315 yuan/mt. Spot market, dragged by low SS futures and compounded by the traditional off-season, end-use demand remained persistently sluggish. Stainless steel mill guidance prices remained flat, and trader quotes mostly stayed stable for now, but market sentiment leaned pessimistic and weak.

SS futures most-traded contract. At 10:15 a.m., SS2608 was quoted at 14,330 yuan/mt, down 15 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 540-940 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi fell by 50 yuan/mt; cold-rolled raw edge 304/2B coil average prices held steady in both Wuxi and Foshan; cold-rolled 316L/2B coil price in Wuxi rose by 100 yuan/mt; hot-rolled 316L/NO.1 coil offers in Wuxi were flat; cold-rolled 430/2B coil prices in Wuxi and Foshan were unchanged.

This week, macro liquidity disturbances intensified, and stainless steel futures followed an independent weak trend, with futures significantly diverging from the movement of SHFE nickel and other nonferrous metals. During the week, fund sentiment switched repeatedly, triggering wild swings in SS futures. The previous key support level of 14,500 yuan/mt was breached, and the overall trend center continued to shift lower, with overall market trading sentiment leaning pessimistic. Spot and inventory side, the breakdown and weakness in futures continued to drag on the spot market, with a concentrated release of bearish fundamentals during the off-season. The market has now entered the traditional consumption off-season, with end-use rigid demand naturally weak. Coupled with the continued decline in futures further dampening market confidence, downstream end-users were dominated by a wait-and-see sentiment, and purchase willingness remained sluggish. This week, mainstream steel mills ended their earlier price-holding strategy and proactively lowered spot guidance prices, triggering a simultaneous pullback in market spot quotes. Market transactions showed a pattern of episodic pulse-like releases followed by rapid cooling. Sustained rigid demand was severely insufficient, and overall trading returned to a sluggish state. Against the backdrop of weak end-user purchases and hindered destocking, the pace of inventory buildup accelerated markedly, with social inventories continuing to accumulate, further highlighting pressure on spot fundamentals. Cost and profit side, this week finished product and raw material prices moved down in tandem. Steel mill smelting profits narrowed slightly but remained positive. Affected by the pullback in spot prices and pressure on finished product profits, mainstream steel mills lowered their raw material purchase expectations and announced low NPI procurement tender prices, driving high-grade NPI market prices lower in turn. Meanwhile, stainless steel scrap purchase prices also fell in tandem, shifting the overall raw material cost center lower. Steel mill profits were slightly compressed WoW, but the industry overall did not fall into losses, and production profit resilience remained. Overall, this week the stainless steel market exhibited a subdued pattern, with futures breaking below key levels, spot prices following the decline and softening, inventory buildup accelerating, and profit margins slightly narrowing. Macro liquidity disruptions drove futures to weaken independently. Off-season rigid demand weakness, steel mills' withdrawal from holding prices firm, and inventory buildup were the core bearish factors for spot. The short-term weak market pattern is hard to reverse, with futures continuing to consolidate on a subdued note and spot prices remaining under pressure.