Cost Advantages Underpin Stainless Steel Scrap Market, Weak End-Use Demand Constrains Short-Term Upside Room [SMM Stainless Steel Scrap Weekly Review]

Published: Jul 31, 2026 16:58

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[SMM Stainless Steel Scrap Market Weekly Review] Cost Advantages Underpin Stainless Steel Scrap Market, End-Use Demand Weakness Restrains Short-Term Upside Room This week, 304 stainless steel scrap off-cuts prices in east China were flat, with a quotation range of 10,400-10,500 yuan/mt; in the Foshan area, 304 stainless steel scrap off-cuts prices remained stable in tandem, within a price range of 10,300-10,600 yuan/mt. From a raw material cost analysis perspective, the current cost of producing stainless steel entirely with stainless steel scrap is about 14,607.48 yuan/mt, while that with high-grade NPI is as high as 14,995.22 yuan/mt, with the two maintaining a stable cost price spread. This week, stainless steel scrap prices remained generally stable. During the week, SS futures showed a consolidation pattern of first declining and then rising, and the fluctuations in futures did not provide clear guidance for the spot market. Stainless steel product spot prices consolidated in tandem, with overall prices basically flat compared to last week. At month-end, stainless steel mills initiated a tender for high-grade NPI procurement, driving NPI prices to rebound slightly, but the extent of the increase was relatively limited, and the upward support from the raw material side was weak, keeping the overall stainless steel scrap market stable. Along with the slight recovery in high-grade NPI prices, the cost advantage of stainless steel scrap relative to it has increased, further highlighting its cost substitution competitiveness and forming solid bottom support for scrap prices. Overall, costs and expectations provided support, but end-use fundamentals continued to suppress the market's upward trend. As some stainless steel mills gradually wrap up previous production cuts and maintenance, the market expects stainless steel production to rebound in August, corresponding rigid demand for stainless steel scrap is expected to increase, combined with the current scrap...

This week, prices of 304 stainless steel scrap off-cuts in east China remained flat, with a quotation range of 10,400-10,500 yuan/mt; similarly, prices in Foshan stayed stable, with a price range of 10,300-10,600 yuan/mt. From a raw material cost perspective, the current stainless steel production cost using only stainless steel scrap as raw material is approximately 14,607.48 yuan/mt, while that using only high-grade NPI reaches 14,995.22 yuan/mt, maintaining a stable cost spread.

This week, stainless steel scrap prices were overall stable. During the week, SS futures showed a consolidation pattern of falling then rising, and the futures fluctuations did not provide clear guidance to the spot market. Stainless steel product spot prices consolidated accordingly, with overall prices basically flat compared to last week. At month-end, stainless steel mills initiated tender purchases for high-grade NPI, driving a slight recovery in NPI prices, but the increase magnitude was relatively limited. The raw material linkage boost was weak, and the stainless steel scrap market remained steadily stable overall. With the slight recovery in high-grade NPI prices, the economic advantage of stainless steel scrap over it increased, highlighting its cost substitution competitiveness and providing solid bottom support for scrap prices. Overall, costs and expectations provided support, but the end-user fundamentals continued to cap market upturns. As some stainless steel mills gradually concluded their previous maintenance and production cuts, the market expects stainless steel production in August to recover, which may boost rigid demand for stainless steel scrap. Combined with the current favorable economic advantages of stainless steel scrap, this provides potential bullish support for the market. However, at this stage, industry weaknesses remain quite prominent. Stainless steel mills' overall profit margins are narrow, coupled with weak downstream demand for end-user products, which hinders terminal transmission. The market lacks sustained upward driving force, significantly capping the upward momentum of stainless steel scrap prices. In summary, in the short term, stainless steel scrap prices will likely maintain a stable consolidation pattern supported by cost advantages and production resumption expectations, with overall upside room limited.

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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