On February 26, SMM reported that SS futures continued to hold up well. Although SHFE nickel weakened during the day, SS futures tested support in the night session and maintained an overall strong trend, closing at 14,275 yuan/mt before noon. In the spot market, driven by the sustained strength of SS futures, market confidence in the peak season of "Golden March, Silver April" remained firm, with offers further increasing. However, due to continuously rising offers and today's pullback in SHFE nickel, trading volume today pulled back compared to the previous two days.
The most-traded SS futures contract strengthened and rose. At 10:30 a.m., the SS2604 contract was quoted at 14,315 yuan/mt, up 80 yuan/mt from the previous trading day. In Wuxi, spot premiums/discounts for 304/2B were in the range of 155-355 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was 8,500 yuan/mt; for cold-rolled mill-edge 304/2B coil, the average price was 14,400 yuan/mt in both Wuxi and Foshan; for cold-rolled 316L/2B coil, the price was 27,425 yuan/mt in Wuxi and Foshan; for hot-rolled 316L/NO.1 coil, the Wuxi price was 26,400 yuan/mt; for cold-rolled 430/2B coil, the price was 7,800 yuan/mt in both Wuxi and Foshan.
During the Chinese New Year holiday, the domestic stainless steel market entered a seasonal closure phase, with the SHFE also closed for the holiday, spot trading suspended, and no significant price fluctuations observed. Overall, the pre-holiday market was characterized by strong futures, stagnant spot trading, weak supply and demand, and significant inventory buildup. Post-holiday, the market is expected to gradually restart, with an overall trend likely to hold up well, though the upward momentum may be constrained. Before the holiday, SHFE nickel and stainless steel futures strengthened on news of tightened nickel ore quota approvals in Indonesia, but later pulled back slightly due to profit-taking. On the supply side, multiple steel mills conducted concentrated annual equipment maintenance, leading to a significant expected decline in the industry's production schedule. On the demand side, downstream end-users also entered the holiday period, halting procurement, resulting in a weak supply-demand dynamic. A slight rise in raw material prices provided some cost support, but steel mills did not face significant losses. Combined with pre-holiday holidays for downstream players and traders leading to notable social inventory buildup, price increases were limited. After the holiday, the spot market is gradually restarting, though some traders remained on holiday in the first week. Market trading volume is expected to gradually increase. Spot prices are anticipated to consolidate with a firm bias in the short term, and recover gradually over the medium and long term as downstream operations resume. Supportive factors for futures remain. Against a generally weak market backdrop, downstream end-users were cautious with pre-holiday stockpiling and are expected to enter a restocking phase post-holiday. Coupled with the approaching traditional peak consumption season of "Golden March, Silver April," demand is likely to recover first, followed by supply, potentially leading to further increases in stainless steel prices.
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