Futures Rebound Boosts Stainless Steel Transactions and Strengthens Quotes [SMM Stainless Steel Daily Review]

SMM reported on August 26 that the SS futures showed a stable fluctuating trend. After the US Fed made dovish remarks, expectations for US Fed interest rate cuts strengthened, and the overall performance of commodity futures was relatively strong. SS futures also broke away from their previous weakness, mainly fluctuating around the 12,900 yuan/mt level during the day. In the spot market, influenced by the rebound in futures, the sentiment for spot quotations improved, with increased market inquiry activity and better trading conditions. Additionally, as the traditional September-October peak season approaches, and with Tsingshan's ferrochrome and ferronickel tender prices rising, market confidence is gradually recovering. Stainless steel prices are showing a stronger trend.

In terms of futures, the most-traded 2510 contract fluctuated. At 10:30 am, SS2510 was quoted at 12,860 yuan/mt, up 30 yuan/mt from the previous trading day. The spot premiums/discounts for 304/2B in Wuxi were in the range of 340-490 yuan/mt. In the spot market, the 201/2B cold-rolled coil in Wuxi was quoted at 8,100 yuan/mt; the 304/2B cold-rolled coil (with edge) in Wuxi averaged 13,125 yuan/mt, and in Foshan, it averaged 13,125 yuan/mt; the 316L/2B cold-rolled coil in Wuxi was 25,675 yuan/mt, and in Foshan, it was 25,675 yuan/mt; the 316L/NO.1 hot-rolled coil in both regions was quoted at 25,100 yuan/mt; the 430/2B cold-rolled coil in both Wuxi and Foshan was 7,400 yuan/mt.

Last week, the SS futures continued to decline, completely erasing the gains made this month, and basically falling back to the levels at the end of July, with the low point reaching the key level of 12,700 yuan/mt. As a result, the spot market also weakened. The downstream market had a low acceptance of the previous high prices, and with the significant pullback in futures, as well as traders adopting price concession strategies under the pressure of selling, spot quotations fell. However, even with the price reduction, it failed to effectively boost transactions, as the market generally exhibited a "rush to buy amid continuous price rise and hold back amid price downturn" mentality, leading to a more pronounced wait-and-see sentiment and further deterioration in trading conditions. But now, as the traditional September-October peak season approaches, there are also reports of production cuts in stainless steel mills, and actual production may be slightly lower than expected. Recently, stainless steel social inventory has seen a seven-week consecutive decline, and the prices of raw materials such as nickel and chromium have risen, with recent expectations for US Fed interest rate cuts increasing, and the national "anti-rat race" policy providing support. Under these multiple supports, stainless steel prices have shown signs of stopping the decline and rebounding this week.