[SMM Stainless Steel Daily Review] Bullish and bearish news alternately impacted SS, causing a retreat after rapid rise, while stainless steel spot prices held steady with subdued trading.

SMM news on June 8: SS futures showed an early rise and later decline. In the morning, an earthquake in the Philippines sparked market concern over nickel ore supply, pushing SHFE nickel and SS futures up together. However, in the afternoon, news from Indonesia suggesting nickel ore quotas may be relaxed sent SS futures lower again. By the close, the most-traded SS contract was quoted at 14,665 yuan/mt. In the spot market, despite the early strength in SS futures, some stainless steel spot offers moved higher, though limited acceptance of high prices kept transactions mediocre.

The most-traded SS futures contract pulled back. At 10:15 a.m., SS2607 was reported at 14,725 yuan/mt, up 90 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi stood in the 345-945 yuan/mt range. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was flat; for cold-rolled unedged 304/2B coil, Wuxi's average price was flat, and Foshan's average price was flat; prices for cold-rolled 316L/2B coil in Wuxi were unchanged; quotes for hot-rolled 316L/NO.1 coil in Wuxi remained stable; cold-rolled 430/2B coil in both Wuxi and Foshan held steady.

Stainless steel futures and spot experienced heightened volatility, with the futures surface first rising then falling amid ex-China macro news, as the off-season character of the market became fully apparent. Industry expectations for the near-term outlook were murky, wait-and-see sentiment was thick, transactions warmed only in pulses with insufficient persistence, and pressure on traders to sell increased, with many offering concessions to boost deals. Overall, the picture was one of a tug-of-war: macro news unsettling the futures, off-season demand weakening, supply undergoing marginal fine-tuning, and inventory halting its decline to build up. On the futures side, SS futures swung sharply, retreating after a rapid rise. During the week, the US adjusted some steel, aluminum, and copper import tariffs, lifting market sentiment and driving the nonferrous metals complex broadly higher, with SS futures surging to 15,175 yuan/mt. But subsequent US economic data pointed to persistent inflationary pressure, and expectations for US Fed interest rate hikes heated up, pressuring commodity markets. Metal futures broadly weakened, and SS futures pulled back accordingly. Recent price action has been dominated by macro news, with support from industry-chain fundamentals on the soft side. In spot and inventory, the mid-week futures surge drove spot prices temporarily higher, releasing the sentiment of rushing to buy amid continuous price rise, and near-term transactions recovered. Yet the market has already entered the traditional consumption off-season, and terminal rigid demand was generally weak; after the futures pullback, subsequent transactions turned sluggish again. Hindered by poor sales, traders generally made price concessions to move goods. On the supply side, some steel mills planned maintenance-related production cuts in June, and industry production edged lower, moderately easing the pressure from goods availability. But the extent of the cuts was limited, and supply pressure did not materially ease. Weighed down by the weak supply-demand balance, this week's social inventory of stainless steel saw a modest buildup to 940,400 mt, ending the prior sustained destocking trend. On the cost and supply side, the raw material market was broadly mediocre, with the advance of high-grade NPI slowing down and prices of stainless steel scrap and high-carbon ferrochrome basically stable. The raw material side lacked upward momentum, limiting any lift to finished product prices. Currently, steel mills are enjoying sound profitability. Profit margins calculated based on spot raw materials are holding at 2%–3%, while margins based on inventory raw materials are reaching 3.5%–5%. Ample profits are fueling mills’ production enthusiasm, and overall industry production schedules remain elevated. Supported by stable costs and moderate profits, mills have little incentive for voluntary production cuts, with the supply side seeing only marginal adjustments. On the whole, the stainless steel market is being notably swayed by macro disturbances, with futures dominating spot price movements and overall market sentiment staying cautious. Fundamental-wise, the off-season demand downtrend is clear, and sluggish end-user transactions represent the core bearish factor. Although mill maintenance is bringing a slight supply contraction, high profits are sustaining elevated production schedules, disrupting the weak supply-demand balance and causing inventories to edge up. The raw material side is providing flimsy support and cannot offset demand-side pressure; supply-demand mismatch risks persist, and prices are under broad pressure. Going forward, the focus will be on US Fed policy expectations, SS futures fluctuations, downstream off-season rigid demand changes, and the progress of mill maintenance implementation.