Stainless steel futures, spot prices and raw materials weaken simultaneously, the cost advantages of stainless steel scrap cannot offset weak trading [SMM Stainless Steel Scrap Market Weekly Review]

Published: Aug 21, 2026 16:09

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[SMM Stainless Steel Scrap Market Weekly Review] Stainless Steel Futures, Spot, and Raw Materials Weaken Simultaneously, Cost Advantages of Stainless Steel Scrap Cannot Offset Weak Transactions This week, prices of 304 stainless steel scrap off-cuts in east China declined, with the quotation range at 10,250-10,350 yuan/mt; prices of 304 stainless steel scrap off-cuts in Foshan also fell, with the price range at 10,150-10,450 yuan/mt. From a raw material production cost perspective, the cost of producing stainless steel entirely from stainless steel scrap is currently about 14,426.56 yuan/mt, while the production cost of fully using high-grade NPI reaches 14,885.76 yuan/mt, maintaining a certain cost price spread advantage between the two. This week, stainless steel scrap prices pulled back weakly overall. SS futures remained persistently low during the week, and the weak pattern in futures was continuously transmitted to the spot market, driving stainless steel finished product prices into the doldrums overall; the alternative raw material high-grade NPI also weakened and declined, forming a linked weak pattern among futures, spot, and raw materials. This directly dragged down stainless steel scrap prices, which also pulled back, and the overall market center continuously shifted downward. Even though stainless steel scrap still has economic advantages over high-grade NPI, cost support is limited and cannot reverse the market's weak trend. Overall, peak season expectations and production increases are difficult to offset multiple bearish pressures. Currently, the market is gradually approaching the traditional September-October peak season, and stainless steel mills' planned production in August has also increased, theoretically providing some support for rigid demand for stainless steel scrap. However, at this stage, stainless steel mills' smelting profits have narrowed significantly, their willingness to purchase and stockpile raw materials is generally weak, coupled with tight tax invoice issues in the industry...

This week, the price of 304 stainless steel scrap off-cuts in east China moved downward, with a quotation range of 10,250-10,350 yuan/mt; in Foshan, the price of 304 stainless steel scrap off-cuts also declined, with a price range of 10,150-10,450 yuan/mt. From the raw material production cost analysis, the cost of producing stainless steel entirely from stainless steel scrap is currently around 14,426.56 yuan/mt, while the production cost of using all high-grade NPI reaches 14,885.76 yuan/mt, with the two still maintaining a certain cost price spread advantage.

This week, stainless steel scrap prices generally pulled back on a weak note. During the week, SS futures remained persistently low, and the weak pattern in futures continuously transmitted to the spot market, dragging stainless steel finished product prices generally in the doldrums; the substitute raw material, high-grade NPI, also weakened synchronously, forming a weak linkage pattern among futures, spot market, and raw materials, directly dragging down stainless steel scrap prices this week, with the market's overall price center continuing to move downward. Even though stainless steel scrap still has an economic advantage over high-grade NPI, the cost support is limited and cannot reverse the market's weak trend.

Overall, peak season expectations and rising production are hard to offset multiple bearish pressures. Currently, the market is gradually approaching the traditional "September-October peak season" consumption period, and the planned production of stainless steel mills in August has also increased, which theoretically provides some support for rigid demand for stainless steel scrap. However, at this stage, stainless steel mills' smelting margins have narrowed significantly, and their willingness to purchase and stockpile raw materials is generally weak. Coupled with the persistent issue of tight tax invoices in the industry, some stainless steel mills have even suspended tender procurement of stainless steel scrap, leading to generally sluggish spot market transactions and complete failure of rigid demand support. Under the resonance of multiple bearish factors—low-level futures trading, weakening finished product prices, cautious steel mill purchasing, and sluggish market transactions—even though stainless steel scrap retains a cost price spread advantage, it is still difficult to change the pattern of prices in the doldrums. In the short term, the stainless steel scrap market may continue to consolidate on a weak note.

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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