SMM reported on March 19 that SS futures extended their downward pullback. Against the backdrop of hawkish remarks from the US Fed and escalating geopolitical conflicts, non-ferrous metals futures generally moved lower, and SS also declined in tandem, closing at 13,935 yuan/mt by the morning session. In the spot market, confidence weakened significantly under the continued decline in SS futures; coupled with the recent pullback in high-grade NPI prices, market expectations for cost support also softened. In a market where transactions had already been sluggish earlier this week, inquiries and trading weakened further. In addition, with supply remaining high in March, traders lowered quotes for 304 stainless steel during the day. However, supported by yesterday’s news of steel mills holding prices firm, 200-series stainless steel strengthened against the trend, with 201 stainless steel prices rising, while downstream end-user purchasing still warranted attention.
The most-traded SS futures contract fell and pulled back. At 10:15 a.m., SS2605 stood at 13,930 yuan/mt, down 100 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 340-540 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi rose by 50 yuan/mt; for cold-rolled trim-edge 304/2B coil, the average price in Wuxi fell by 150 yuan/mt, and in Foshan by 50 yuan/mt; cold-rolled 316L/2B coil in Wuxi fell by 200 yuan/mt; hot-rolled 316L/NO.1 coil in Wuxi was quoted down by 100 yuan/mt; cold-rolled 430/2B coil in both Wuxi and Foshan remained basically stable.
As the traditional peak consumption season of “Golden March and Silver April” arrived, the stainless steel market entered a window for demand recovery, with downstream end-users gradually recovering and recent inquiry and purchasing activity picking up notably. However, stainless steel spot prices overall remained basically stable, with no significant fluctuations. Terminal procurement was still mainly driven by rigid demand, and the market had yet to show a fully heated peak-season pattern, while wait-and-see sentiment still lingered. On the futures side, affected by multiple factors including the continued escalation of Iran-related geopolitical conflicts, the US resumption of the tariff war, and intensifying fluctuations in the US dollar exchange rate, uncertainty in macro news increased significantly. This week, SS futures moved sideways within a range, showing mixed performance and no clear direction. Inventory side, stainless steel social inventory declined this week, driven by the recovery in downstream demand and pick-up of earlier orders, ending the sharp accumulation trend since February. However, inventory remained at a relatively high level, and destocking pressure had not been fully eased. Although inventory stopped rising and pulled back, releasing a positive signal and boosting market confidence to some extent, high inventory levels combined with expected supply increases in March still constrained the market somewhat. Traders maintained a steady pace of shipments, with no aggressive selling. Supply side, earlier production cuts and maintenance at steel mills had fully ended, and the expected stainless steel production schedule for March remained high, with pressure from incremental supply gradually being released. Affected by the sharp buildup in social inventory in February, stainless steel mills are currently focused on shipping at stable prices. Recently, major stainless steel mills announced unchanged guidance prices for consecutive periods, proactively controlling price fluctuations, accelerating inventory turnover, and easing the dual pressure from the supply side and inventory side. However, expectations of high supply within the month still posed potential pressure on the market. Cost support continued to strengthen. Recently, major stainless steel mills kept procurement prices for high-grade NPI relatively low, which to some extent restrained its upward momentum. However, nickel ore prices remained high, driving NPI prices to continue edging up slowly. High-carbon ferrochrome prices also strengthened under the dual support of tight spot availability and rising chrome ore prices, further reinforcing cost support for stainless steel. Overall, the core contradiction in the stainless steel market this week was the mismatch between expectations of high supply and the pace of demand recovery and inventory destocking. Although the market formally entered the traditional peak consumption season, with downstream demand recovery, inventory stopping rising and pulling back, and relatively strong cost support providing positive factors, uncertainty in macro news remained high and the overall market stayed cautious. Coupled with high supply within the month and overall elevated inventory, stainless steel prices are expected to generally stable with slight rise.
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