SS futures recovery unlikely to change steel mill production cut expectations, narrowing economic advantages keep stainless steel scrap prices stable [SMM Stainless Steel Scrap Market Weekly Review]

Published: Sep 24, 2026 16:52 (GMT+8)

Save

[SMM Stainless Steel Scrap Weekly Review] SS Futures Recovery Fails to Offset Steel Mill Production Cut Expectations; Narrowing Cost Advantage Keeps Stainless Steel Scrap Prices Stable This week, 304 stainless steel scrap off-cuts prices in east China remained flat, with a quotation range of 9,700-9,800 yuan/mt. In Foshan, 304 stainless steel scrap off-cuts prices also held steady, ranging from 9,800 to 10,100 yuan/mt. From a raw material cost perspective, the production cost of stainless steel using only stainless steel scrap as feedstock stood at approximately 13,763.18 yuan/mt, while the cost using only high-grade NPI reached 14,186.61 yuan/mt. Stainless steel scrap still holds a certain cost substitution advantage over high-grade NPI, but the price spread between the two has narrowed. This week, stainless steel scrap prices remained in the doldrums overall. During the week, SS futures rebounded from lows, and with the holiday approaching, end-user buyers' bargaining power weakened somewhat. Spot prices of finished products edged up, and the decline in stainless steel scrap prices eased, keeping them stable. However, the positive impact from the futures recovery lacked sustainability, as end-user demand did not actually recover. Overall market transaction volumes saw limited improvement, and downstream players held strong pessimistic wait-and-see sentiment toward the near-term outlook, making it difficult to provide any substantial boost to scrap prices. Meanwhile, high-grade NPI prices continued to pull back, further squeezing the cost substitution advantage of stainless steel scrap and weakening the bottom support for scrap. The market as a whole showed a stable but slightly weak trend. Overall, the modest futures recovery and pre-holiday restocking demand were insufficient to offset multiple bearish factors, including weak end-user demand and soft supply expectations. Hopes for a peak-season recovery have now completely faded, and end-user restocking demand remains...

This week, 304 stainless steel scrap off-cuts prices in east China remained flat, with a quotation range of 9,700-9,800 yuan/mt; prices in Foshan also held steady, ranging from 9,800 to 10,100 yuan/mt. From a raw material cost perspective, the production cost of stainless steel using only stainless steel scrap is approximately 13,763.18 yuan/mt, while using only high-grade NPI reaches 14,186.61 yuan/mt. Stainless steel scrap still holds some economic substitution advantage over high-grade NPI, but the price spread between the two has narrowed.

This week, stainless steel scrap prices overall maintained a weak and stable pattern. During the week, SS futures rebounded from low levels, and with the holiday approaching, end-user buyers' bargaining power weakened somewhat. Finished product spot prices firmed slightly, and the decline in stainless steel scrap prices eased and stabilized. However, the positive impact from the futures recovery lacked sustainability, as end-user demand did not actually recover. Overall market transaction volumes improved only marginally, and downstream players held strong pessimistic wait-and-see sentiment toward the outlook, making it difficult to provide any substantive boost to scrap prices. Meanwhile, high-grade NPI prices continued to pull back, further compressing the cost substitution advantage of stainless steel scrap and weakening bottom support for scrap prices. The market overall exhibited a stable but slightly weak character.

Overall, the modest futures recovery and pre-holiday restocking demand were insufficient to offset multiple bearish factors, including sluggish end-user demand and weak supply expectations. Hopes for a peak-season recovery have now completely faded, end-user demand remains persistently weak, and market trading sentiment is subdued. Additionally, expectations for stainless steel mill production cuts in October continue to build, and raw material demand from the production side is likely to contract further. Steel mills are becoming more cautious in their purchase willingness for stainless steel scrap, and buying activity in the market remains sluggish. Under the combined weight of multiple bearish factors—absent demand recovery, a disproven peak season, expectations for mill production cuts, falling substitute raw material prices, and narrowing cost advantages—stainless steel scrap prices lack upward momentum. In summary, the short-term weak and stable market pattern is unlikely to reverse, and prices are unlikely to see a trend-driven rebound. Stainless steel scrap prices are expected to continue consolidating within a range in a weak and stable manner.

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.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

51 mins ago

Price recovery with weak raw materials; stainless steel mill profits marginally recover [SMM Analysis]

[SMM Analysis] Prices Recover While Raw Materials Remain Weak, Stainless Steel Mill Profits Rebound Marginally This week, the stainless steel futures and spot markets showed a divergent pattern, with finished products recovering slightly while raw materials weakened overall. Steel mills achieved marginal profit recovery by pushing for lower raw material prices. Based on 304 cold-rolled calculations, steel mill profit structures diverged: profit margins calculated with current raw material prices recovered to 1.24%, turning positive, but margins calculated with inventory raw materials remained at -1.98% due to previously high-priced raw materials. This week, the decline in nickel-based raw materials slowed and gradually stopped falling and stabilized. Earlier, nickel pig iron prices continued to fall to low levels, and combined with weather-related water shortages in Indonesia disrupting production, expectations for supply contraction rose, providing bottom support for prices. Low valuations coupled with supply positives drove increased restocking demand from steel mills, significantly weakening upstream willingness to cut prices, and the downward pace of nickel pig iron essentially stalled. As of this Friday, the delivered tax-inclusive price of domestic 10-12% grade Indonesian high-grade NPI fell only slightly by 3 yuan/nickel unit to 1,048 yuan/nickel unit, with nickel-based costs gradually stabilizing. This week, stainless steel scrap remained weak but stable, lacking momentum for a rebound. Low-level recovery in SS futures and sporadic pre-holiday restocking demand only provided slight support for finished products, but end-use demand did not recover substantively and transactions remained sluggish, making it difficult to drive scrap prices higher. Meanwhile, the pullback in high-grade NPI compressed the substitution advantage of scrap, and with the failed expectations for a September peak season and rising expectations for production cuts at steel mills in October, steel mills remained cautious in procurement and continued to push for lower prices. Under multiple bearish constraints, scrap struggled to stage a trend rebound and continued to move sideways in a weak range. As of this Friday, the tax-exclusive price of mainstream 304 off-cuts in Shanghai remained flat at 9,700-9...

51 mins ago

1 hour ago

[SMM Analysis] Macro Headwinds Materialize, Futures Recover; Pre-Holiday Essential Demand Release Drives Stainless Steel Inventory Destocking

[SMM Analysis] Macro Headwinds Materialize, Futures Recover, Pre-Holiday Just-in-Time Demand Releases Stainless Steel Inventory Destocking SMM, September 24: This week, stainless steel social inventory continued its destocking trend, with the inventory midpoint moving steadily lower and pressure from accumulated market supply easing further. Total inventory in the two core markets of Wuxi and Foshan pulled back significantly, and the pace of destocking widened this week. This week, recovering macro sentiment combined with pre-holiday just-in-time demand release to drive continued stainless steel inventory destocking. With the US Fed's rate hike now landed, the macro headwinds that had weighed on the market were largely priced in, significantly easing bearish market sentiment. SS futures strengthened in a recovery move, lifting spot prices in tandem and visibly reviving market trading activity. Ahead of the Mid-Autumn Festival holiday, downstream end-users concentrated their release of phased just-in-time procurement demand to ensure normal production before the break, boosting inquiry and transaction activity and improving the efficiency of inventory digestion. Under the combined tailwinds of recovering futures sentiment, warming spot prices, and concentrated pre-holiday just-in-time restocking, market supply was effectively absorbed, driving social inventory steadily lower. Overall, the materialization of macro headwinds restoring market confidence, stronger futures lifting spot prices, and concentrated pre-holiday just-in-time demand release from end-users were the core drivers behind this week's sustained and substantial stainless steel inventory destocking. At the current stage, market pessimism is gradually fading, the low-level recovery in futures continues, and with pre-holiday just-in-time demand providing support, the pace of inventory destocking keeps strengthening. In the short term, as macro headwinds are fully priced in and market sentiment steadily recovers, inventory buildup pressure continues to ease. Supported by the orderly release of end-user just-in-time demand, inventory is likely to extend its mild destocking trend...

1 hour ago

2 hours ago

[SMM Stainless Steel Daily Review] SS Futures Consolidate and Close Higher, Spot Cargo Transactions Weak with Prices Pulling Back

[SMM Stainless Steel Daily Review] SS futures consolidate higher, spot trading weak with offers pulling back According to SMM on September 24, SS futures consolidated on a strong note. Although the night session weakened at one point, prices gradually recovered and strengthened after the morning open. By the close, the most-traded SS contract settled at 13,815 yuan/mt. In the spot market, as the last trading day before the Mid-Autumn Festival, most downstream end-users had already completed pre-holiday stockpiling. Combined with the weak sentiment carried over from the night session, spot inquiries and trading were sluggish in the morning, and trader offers pulled back slightly as a result. SS futures most-traded contract. At 10:15 a.m., SS2611 was at 13,760 yuan/mt, down 95 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the 460-810 yuan/mt range. In the spot market, the average price of Wuxi cold-rolled 201/2B coil was flat; for cold-rolled mill-edge 304/2B coil, the Wuxi average price fell 25 yuan/mt, while the Foshan average price was flat; Wuxi cold-rolled 316L/2B coil prices were flat; for hot-rolled 316L/NO.1 coil, Wuxi offers were flat; cold-rolled 430/2B coil in both Wuxi and Foshan was flat. This week, stainless steel futures showed a pattern of rebounding from lows and consolidating in recovery, with improving macro sentiment driving the pace of futures. Earlier, under macro headwinds and sluggish demand, futures fell sharply and hit a year-to-date low of 13,290 yuan/mt. Following the US Fed's rate hike, the previously accumulated macro headwinds were largely priced in, market pessimism eased, and SS futures saw a sustained recovery and rise, overall breaking away from the prior one-sided decline...

2 hours ago