Bearish Factors Converge as Stainless Steel Scrap Weakens, Cost Advantages Stabilize Price Floor [SMM Stainless Steel Scrap Market Weekly Review]

Cold-rolled and hot-rolled prices edged down this week, with overall transactions weakening WoW. In terms of supply, rolling line maintenance decreased WoW this week, with reduced impact volume, and overall HRC production increased. Demand side, apparent demand rebounded slightly this week. Inventory side, SMM's HRC social inventory this week was 4.5281 million mt, down 185,300 mt WoW, down 3.93% WoW. By region, North China, east China, and Northeast China saw notable inventory drawdowns, the central and western regions saw narrow destocking, while the South China market continued inventory buildup. Cost side, coking coal and coke futures weakened this week, suppressing coking coal and coke prices. Iron ore was in the doldrums following .....

[SMM Analysis] Raw Material Prices See Slight Correction, Stainless Steel Mill Profits Expand This week, both stainless steel production costs and prices pulled back slightly, and steel mill profits expanded accordingly. Using 304 cold-rolled as the calculation benchmark, the current raw material-based profit margin was 2.19%, while the low-level inventory raw material-based profit margin reached 3.67%. Overall industry profitability was moderate, and steel mills therefore maintained high production schedules. On the nickel-based raw material cost side, high-grade NPI prices first declined then rose this week, showing an overall slight pullback. During the week, news emerged that Indonesia planned to unify ferroalloy exports under state-owned enterprise operations. Although stainless steel scrap still held a notable cost-effectiveness advantage and steel mills had a strong desire to bargain down prices, supply uncertainty fueled a strong market sentiment to hold prices firm and hold back from selling, and prices ultimately stopped falling and stabilized. As of this Friday, mainstream high-grade NPI with a grade of 10-12% fell 4.5 yuan per nickel unit, closing at 1,140.5 yuan/nickel unit. Stainless steel scrap market, prices pulled back this week. The decline was driven by the combined impact of multiple bearish factors, including weak spot cargo performance in finished products, steel mills pushing for lower raw material prices, and downward adjustments in molten steel quotes. However, the decline was limited for the following reasons: the tight tax invoice situation was expected to ease, trading pain points were being gradually resolved, and steel mill purchase expectations rose accordingly. In addition, steel scrap held a greater cost-effectiveness advantage over NPI, and coupled with steel mills still being profitable and rigid demand remaining robust, prices were effectively supported. The overall pattern showed "weakening spot cargo, cost support, and recovering expectations," and short-term prices were expected to fluctuate in tandem with finished products, with limited downside room. As of this Friday, mainstream 30 in the Shanghai area...