Peak season disappoints and cost control pushes for lower prices, stainless steel mills continue inverted pattern [SMM Analysis]

This week, stainless steel product prices and production costs pulled back in tandem, with stainless steel mills remaining in a cost-profit loss position. Based on 304 cold-rolled calculations, this week's profit margin was -0.78% using current raw material costs and -2.16% using inventory raw material costs.

On the nickel raw material side, high-grade NPI prices extended their decline this week. The industry's anticipated demand recovery during the traditional "September-October peak season" for stainless steel ultimately failed to materialize, with market confidence continuing to erode and stainless steel prices sliding steadily. Stainless steel mills faced losses, significantly increasing their willingness to push for lower prices and control costs. Combined with downward revisions to September production schedules and ample early raw material stockpiles, overall purchasing sentiment remained subdued, further dragging down high-grade NPI prices. As of this Friday, the delivered duty-paid price of 10-12% grade Indonesian high-grade NPI in China fell by 8 yuan/nickel unit to 1,114 yuan/nickel unit.

Stainless steel scrap prices consolidated with a downward bias this week. Weakness in both the futures market and the finished product market, coupled with steel mill losses and proactive price-cutting purchases, pushed scrap prices lower. Although scrap itself holds cost advantages, the "September peak season" demand ultimately disappointed, steel mill production schedules contracted, and tight tax invoices further dampened overall trading sentiment. Under the weight of multiple bearish factors, price support at the bottom continued to weaken, and stainless steel scrap prices are expected to remain in the doldrums in the near term. As of this Friday, mainstream 304 off-cuts in Shanghai fell by 200 yuan/mt to 10,100 yuan/mt, excluding tax.

On the chromium raw material side, high-carbon ferrochrome prices remained largely stable this week. Last week, major stainless steel mills successively announced September tender purchase prices for high-carbon ferrochrome. Current retail ferrochrome prices are already close to steel mill tender levels, and ferrochrome producers outside Inner Mongolia have fallen into losses, leaving little room for further price concessions. Although ferrochrome supply is not currently tight, further downward price movement still faces considerable resistance. As of this Friday, mainstream high-carbon ferrochrome prices in Inner Mongolia were flat MoM at 7,900 yuan/mt (50% metal content).