Persistent Weakness in Spot and Futures Weighs on Market Sentiment; Cost Advantages Provide Support, Keeping Stainless Steel Scrap Prices Temporarily Stable [SMM Stainless Steel Scrap Market Weekly Review]

Published: Aug 28, 2026 16:44

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[SMM Stainless Steel Scrap Market Weekly Review] Continued Weakness in Futures and Spot Weighed on Market Sentiment; Cost Advantages Provided a Floor, Keeping Stainless Steel Scrap Prices Temporarily Steady This week, prices of 304 stainless steel scrap off-cuts in east China held flat, with a quotation range of 10,250-10,350 yuan/mt; prices of 304 stainless steel scrap off-cuts in Foshan also stayed steady, with a price range of 10,150-10,450 yuan/mt. From the perspective of raw material production costs, the cost of producing stainless steel entirely from stainless steel scrap was about 14,426.56 yuan/mt, while the cost of producing it entirely from high-grade NPI reached 14,885.76 yuan/mt, and the two still maintained a certain cost spread advantage. This week, stainless steel scrap prices overall temporarily remained steady. During the week, SS futures fell further to new lows, with bearish sentiment in futures continuing to be released and transmitted to the spot cargo market, driving finished stainless steel prices to pull back in tandem; prices of the substitute raw material high-grade NPI also remained in the doldrums, and the overall sentiment across futures, spot, and the raw material side was bearish. However, stainless steel scrap still retained certain economic advantages over high-grade NPI, and its cost-substitution attribute continued to provide a floor, supporting stainless steel scrap prices to temporarily stay stable this week, without falling in tandem with futures. Overall, the cost floor was difficult to offset the bearish fundamentals. The market’s previously held expectations for a consumption recovery during the September-October peak season fell short, downstream demand provided insufficient support, and coupled with a marked narrowing of stainless steel mills’ own profit margins, raw material procurement sentiment remained cautious amid pressure on the production side. The market’s expectations for a rise in September futures were weak, further weighing on steel mills’ willingness to restock, and this week stainless steel scrap...

This week, prices of 304 stainless steel scrap off-cuts in east China held flat, with a quotation range of 10,250-10,350 yuan/mt; prices of 304 stainless steel scrap off-cuts in Foshan also stabilized in tandem, with a price range of 10,150-10,450 yuan/mt. Cost side, based on production cost analysis, the cost of producing stainless steel using stainless steel scrap exclusively as the raw material was about 14,426.56 yuan/mt, while the cost of production using high-grade NPI exclusively reached 14,885.76 yuan/mt, and the two still maintained a certain cost price spread advantage.

This week, stainless steel scrap prices overall temporarily held steady. During the week, SS futures fell further and probed lower; bearish sentiment in futures continued to release and transmit to the spot market, driving stainless steel finished product prices to pull back in tandem. Meanwhile, prices of the substitute raw material high-grade NPI were also in the doldrums, and the overall atmosphere across futures, spot, and the raw material side was bearish. However, stainless steel scrap still retained certain economic advantages versus high-grade NPI, and its cost-substitution attribute continued to provide a floor, supporting stainless steel scrap prices to remain temporarily stable this week, without falling in tandem with futures.

Overall, the cost floor was difficult to offset the bearish fundamentals. The market’s previously held expectations for demand recovery during the September-October peak season fell short; downstream demand provided insufficient uplift. In addition, stainless steel mills’ profit margins narrowed markedly, and with production under pressure, raw material procurement sentiment was cautious. The market’s expectations for a rise in September futures were weak, further suppressing steel mills’ willingness to restock. This week, overall transactions in stainless steel scrap were sluggish, with insufficient support from rigid demand. Amid the resonance of multiple bearish factors—weakening futures and spot, disappointed peak-season expectations, cautious steel mill procurement, and sluggish market trading—cost support gradually weakened. In the short term, stainless steel scrap prices lacked upward momentum, and the market is expected to remain in the doldrums.

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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