[SMM Analysis] Bearish Factors Materialize, Sentiment Recovers, Supply Marginally Contracts, Stainless Steel Inventory Slightly Destocks

SMM, September 17: This week, stainless steel social inventory ended the prior mild buildup trend, achieving overall moderate destocking, with the inventory midpoint edging lower and peak-season inventory pressure easing marginally. Total inventory in the two core markets of Wuxi and Foshan pulled back slightly, declining from 926,200 mt on September 10, 2026, to 923,800 mt in the latest period, down 0.26% WoW, with inventory showing a steady destocking trend overall.

This week, stainless steel market sentiment was initially subdued before firming, as macro headwinds materialized and low-level restocking demand was released, jointly driving mild inventory destocking. In the run-up to the US Fed rate hike during the week, bearish macro sentiment weighed on the market, SS futures fell sharply, with the low briefly touching 13,290 yuan/mt, the spot market was gripped by pessimistic wait-and-see sentiment, end-user transactions were sluggish overall, and the pace of cargo destocking slowed temporarily. Once the Fed rate hike landed, macro headwinds were largely exhausted, and with futures prices pulling back to the year's low range, market cost-effectiveness became prominent, downstream players and traders gradually showed low-level restocking demand, driving a phased recovery in spot transactions and effectively accelerating on-market cargo destocking. Supply-side pressure also eased marginally, as stainless steel mill production schedules pulled back in September, the pace of industry cargo release contracted, and futures warrant inventory continued to decline, further supporting steady destocking of social inventory.

Overall, the materialization of macro headwinds repairing market sentiment, the release of low-level restocking demand, the pullback in steel mill production schedules, and the continued destocking of warrants were the core drivers behind this week's slight pullback in stainless steel social inventory. At the current stage, peak-season rigid demand for stainless steel has not yet fully recovered, but phased restocking demand continues to be released under low-price support, effectively offsetting the prior pressure from weak transactions and driving moderate inventory destocking. In the short term, low-level support is emerging in the market, inventory buildup pressure is easing, and prices are likely to maintain a stable fluctuating trajectory.