[SMM Analysis] Indonesian Stainless Steel Production Remains Stable, RKAB Quota Concerns Loom

First of all, Happy New Year! Wishing everyone a prosperous start to the year.

During the Chinese New Year holiday, the Indonesian stainless steel market maintained stable operations overall. On the production side, major smelters and supporting cold-rolling lines maintained normal production rhythms without shutdowns, ensuring a continuous supply of resources. On the sales and procurement side, although mainstream order flow slowed due to holiday factors, sporadic overseas orders continued to function, maintaining a certain level of liquidity in the market.

Looking ahead to the post-holiday market:

• Cost Side: Market concerns regarding the uncertainty of Indonesian RKAB approvals are rising. With expectations of quota cuts and the ongoing rainy season restricting mining and transportation, the supply of nickel ore remains tight, providing strong logic for cost support.
• Supply Side: Continuous production during the holiday has reserved ample spot resources for the market recovery. As logistics normalize, shipments are expected to gradually return to normal.
• Demand Side: As domestic and international end-users resume work, restocking demand is expected to be released gradually. Coupled with the continuity of overseas orders, market activity is poised for a quick rebound.

Overall, the post-holiday Indonesian stainless steel market shows an orderly connection between supply and demand. Under the combined effect of RKAB quota cut expectations and cost support, prices are expected to run stable to strong.