According to SMM on September 1, SS futures extended the previous downtrend, weakening further and pulling back, with the low point briefly dipping to 13,775 yuan/mt. Although the opening was briefly boosted by stronger SHFE nickel, leading to some rebound and repair, futures subsequently turned lower again and weakened. By the close, the most-traded SS contract settled at 13,825 yuan/mt. In the spot market, the continued pullback in SS futures, coupled with further price cuts in quotes from agents of a mainstream stainless steel mill, drove stainless steel spot prices lower. Under the influence of the market's "rush to buy amid continuous price rise and hold back amid price downturn" sentiment, overall trading remained sluggish and difficult to improve.
SS futures most-traded contract. At 10:15 a.m., SS2610 was at 13,895 yuan/mt, up 30 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the 475-875 yuan/mt range. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi was flat; for cold-rolled mill-edge 304/2B coils, the average price in Wuxi fell 100 yuan/mt, and the average price in Foshan fell 75 yuan/mt; cold-rolled 316L/2B coil prices in Wuxi were flat; hot-rolled 316L/NO.1 coil quotes in Wuxi were flat; cold-rolled 430/2B coils in both Wuxi and Foshan were flat.
This week, stainless steel futures showed an overall weak breakdown trend, with volatility intensifying and the price center continuing to shift lower. Futures were in the doldrums throughout the week. Midweek, a sudden safety incident at a nickel-iron smelting line in east China raised supply concerns, briefly driving SS futures to shoot up and rebound, but the positive impact lacked sustainability. The core bearish market logic remained unchanged, and futures subsequently weakened again, breaking below the key 14,000 yuan/mt level. Bearish sentiment continued to be released, and market trading sentiment was weak. The spot market weakened in tandem with futures, with pre-peak-season demand still absent and the supply-demand imbalance becoming more pronounced. As the market entered late August, approaching the traditional September-October peak season, end-user stockpiling in advance had not started as expected. Downstream rigid demand remained weak, trading in the market stayed sluggish, and overall market confidence was insufficient. Supply-demand pressure continued to accumulate, with weak end-user purchasing and significant overall shipment pressure. Steel mills focused on active selling and reducing their own inventories, driving an increase in circulating supply. This week, stainless steel social inventory rose further, extending the inventory buildup pattern. Meanwhile, mainstream steel mills offered price compensation to agents for earlier allocations, clearly loosening their price-holding strategy and further weakening spot price support. Combined with the continued breakdown in futures, the spot price center kept pulling back. Cost and profit factors provided a bottom support, effectively limiting the room for deep spot price declines. This week, stainless steel product prices and nickel-based raw material prices pulled back in tandem, but product prices fell more sharply due to the drag from futures. The price spread between products and raw materials continued to narrow, further squeezing steel mill smelting profits, and the industry as a whole was already on the edge of losses. Cost side rigid support is gradually becoming more evident, effectively offsetting some bearish factors in futures and supply-demand pressure, making the downside in spot prices relatively controllable, with the market showing a subdued but hard-to-slump character. Overall, this week the stainless steel market exhibited a game pattern where futures retreated after rapid rise and broke key levels, peak-season preheating demand fell short, steel mills' hold prices firm stance loosened, inventory continued to build up, and costs neared losses to provide a floor. In the short term, weak end-use demand, market inventory buildup, and bears dominating futures are the core bearish factors, making it difficult to reverse the weak market trend; however, the risk of losses continues to constrain downside room, and the market is likely to maintain subdued consolidation. Going forward, focus on the sustainability of SS futures, the pace of downstream peak-season stockpiling, changes in steel mill shipments and price-holding policies, raw material and finished product price spread changes, and the progress of social inventory buildup.
