According to SMM on September 4, SS futures were supported by expectations for production cuts at stainless steel mills, coupled with stable social inventory of stainless steel, and saw a further recovery rebound. However, the overall increase was limited. By the close, the most-traded SS contract settled at 13,855 yuan/mt. In the spot market, driven by the rebound in SS futures, stainless steel spot traders kept their quotes stable. Although transactions remained mediocre and had not clearly recovered, the price decline had eased.
SS futures most-traded contract. At 10:15 a.m., SS2610 was at 13,870 yuan/mt, up 40 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 450-800 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi was flat; for cold-rolled 304/2B coils with mill edge, the average price in Wuxi was flat, and the average price in Foshan was flat; the price of cold-rolled 316L/2B coils in Wuxi was flat; for hot-rolled 316L/NO.1 coils, quotes in Wuxi were flat; cold-rolled 430/2B coils in both Wuxi and Foshan were flat.
This week, stainless steel futures overall extended a weak trend and broke down further. The traditional "September peak season" consumption period has officially begun, but expectations for demand recovery fell through. Market sentiment turned pessimistic and bearish, and SS futures weakened under pressure. The weekly low briefly dipped below 13,700 yuan/mt, the market valuation center continued to pull back, and bearish sentiment dominated. The spot market weakened in tandem with futures, with no pre-peak-season rally, further intensifying the weak supply-demand imbalance. The market has now entered the traditional peak consumption window, but downstream end-users have not shown concentrated stockpiling. Rigid demand remained persistently weak, and overall market transactions were sluggish. Traders' willingness to purchase cooled sharply, with strong wait-and-see sentiment prevailing. At the same time, there was a strong push to sell and reduce inventory, further increasing the pressure from circulating supply and amplifying the pressure on steel mills' allocations. Affected by the transmission of pessimistic sentiment, market guidance prices and trader agent quotes were lowered successively. The spot price center continued to pull back, highlighting the weak linkage between futures and spot prices. On the inventory side, a structural divergence emerged. This week, futures remained at low levels, and warrant inventory steadily pulled back, driving a slight decline in stainless steel social inventory. However, fundamental pressure has not materially eased. Steel mill production schedule cuts were limited, overall capacity remained at high levels, and with terminal rigid demand persistently absent, destocking efficiency was low. Overall industry inventory pressure remained high, and the loose supply-demand pattern continued. Cost and profit pressures were fully evident, with steel mills falling into a loss-making position. This week, stainless steel product and raw material prices pulled back in tandem, but product prices were dragged down more than raw material prices by futures, officially pushing the industry into losses. Steel mill smelting margins contracted. Under profit pressure, steel mills have increasingly pushed for lower prices of nickel-based raw materials, which in turn suppressed raw material price trends, forming a negative cycle of "falling product prices, profit losses, and raw material price suppression." Overall, this week's stainless steel market exhibited a weak game pattern characterized by dashed peak-season expectations, sluggish end-user demand, futures breaking down, spot prices following the decline, divergent inventory structures, and steel mill losses. In the short term, the failure of peak-season demand to recover, spreading market pessimism, high production schedules at steel mills, and bear-dominated futures constitute the core bearish factors, keeping the market weak. Going forward, focus on the pace of SS futures stopping falling and repairing, the realization of downstream peak-season demand and stockpiling progress, adjustments in steel mill production schedules, changes in raw material-product price spreads, and the pace of inventory destocking.
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