[SMM Stainless Steel Scrap Market Weekly Review] Weak Futures Dragged Down Stainless Steel Scrap, Cost Advantages Underpinned the Market This week, prices of 304 stainless steel scrap off-cuts in east China pulled back, with the quotation range at 10,600-10,700 yuan/mt; prices of the same-spec stainless steel scrap off-cuts in Foshan held steady, with the price range at 10,400-10,700 yuan/mt. From a raw material production cost perspective, the cost of producing stainless steel entirely from stainless steel scrap was approximately 14,821.71 yuan/mt, while the cost of production entirely using high-grade NPI reached 15,173.94 yuan/mt. Stainless steel scrap prices declined and pulled back this week. SS futures were generally in the doldrums, with futures continuously under pressure, which in turn transmitted to the spot market, driving spot stainless steel finished product prices to pull back in tandem. The alternative raw material high-grade NPI also declined simultaneously, but its own raw material fundamentals remained relatively firm, limiting the price drop. As stainless steel spot prices trended downward, steel mills still retained certain smelting profits, production willingness stayed high, and steel mill production schedules showed no reduction. Meanwhile, with the limited decline in high-grade NPI, the cost advantages of stainless steel scrap relative to high-grade NPI became more prominent during the week. Even though industry tax invoice issues persisted, they did not affect steel mills' procurement pace, and procurement demand for stainless steel scrap with better cost advantages remained solid. Overall, the stainless steel scrap market this week exhibited a pullback pattern characterized by "weak futures, resilient raw materials, and demand underpinning." Bearish futures dominated the short-term trend, but rigid demand and cost price spread advantages formed strong support. Tax invoices...

[SMM Analysis] Macro Sentiment Weighed on Futures, Stainless Steel Profits Narrowed Amid Raw Material Divergence Stainless steel production costs pulled back this week, and steel mill profits narrowed, with profit divergence driven by differing raw material inventory costs. Using 304 cold-rolled as the calculation benchmark, the profit margin based on current raw material costs was 1.87%, while the profit margin based on low-level inventory raw material costs was 4.48%. Overall industry profitability remained moderate, steel mills maintained high production schedules, and operating rates stayed stable. Nickel-based raw material costs: Nickel-based raw material prices came under pressure this week, largely driven by futures sentiment. SHFE nickel and stainless steel futures declined consecutively, pulling high-grade NPI market prices down in tandem. However, cost support in the NPI industry remained strong, with widespread firm-pricing sentiment across the market. Additionally, high-grade NPI sources with higher nickel content were scarce within the industry, resulting in structural price divergence in NPI, with prices for high-grade NPI above 12% grade remaining firm. As of this Friday, mainstream 10-12% grade high-grade NPI fell 6 yuan per nickel unit, closing at 1,145 yuan/nickel unit. Stainless steel scrap market: Stainless steel scrap prices pulled back this week. SS futures trended weaker, dragging spot prices lower in tandem. Although high-grade NPI also declined, the drop was limited, highlighting the cost advantage of stainless steel scrap. Steel mill smelting profits remained moderate, production schedules stayed high, and procurement demand remained solid. The overall picture showed "weak futures, resilient raw materials...

[SMM Stainless Steel Daily Review] Macro Disturbances Dragged SS Futures Lower; Low Inventory Pressure and Rigid Demand Supported Stainless Steel Spot Prices SMM, May 15 — SS futures continued to be in the doldrums. Non-ferrous metal futures extended the previous day's decline, and SS also fluctuated downward in tandem. As of the morning close, the most-traded SS contract was quoted at 14,825 yuan/mt. Spot market side, dragged by the persistently weak SS futures, stainless steel spot prices pulled back in tandem. However, stainless steel social inventory has been on an overall downward trend recently, and traders faced relatively small shipment pressure. Market confidence remained stable, and price declines were relatively limited. The most-traded SS contract fell and pulled back. At 10:15 AM, SS2605 was quoted at 14,890 yuan/mt, down 60 yuan/mt from the previous trading day. Spot premiums for 304/2B in the Wuxi area were in the range of 380-680 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi remained flat; for cold-rolled untrimmed 304/2B coils, the average price in Wuxi fell 100 yuan/mt, and the average price in Foshan fell 100 yuan/mt; cold-rolled 316L/2B coils in the Wuxi area held steady; hot-rolled 316L/NO.1 coils were quoted stable in Wuxi; cold-rolled 430/2B coils in both Wuxi and Foshan held steady. The stainless steel market was dragged by the weak and volatile futures, with notable downward pressure, but overall spot price declines remained limited, highlighting the divergence between futures and spot. Downstream end-users adopted a cautious wait-and-see stance due to macro uncertainties, with no concentrated restocking observed. However, rigid demand purchases remained solid, and the resilience of rigid demand provided a foundation for spot prices...

This week, stainless steel spot prices and production costs strengthened in tandem, with stainless steel mill smelting profits narrowing slightly. Taking 304 cold-rolled products as an example, based on current raw material prices, the full cost profit margin was 2.9% this week; calculated using inventory raw material costs, the profit margin reached 6.03%. Cost side for nickel-based raw materials, high-grade NPI prices continued to rise sharply this week. Driven by the strengthening of SS contracts, high-grade NPI prices surged after the Labour Day holiday. Although futures subsequently pulled back, strong price-holding willingness persisted in the market, supported by high stainless steel production schedules, robust demand, and NPI's own cost support, keeping prices firm. As of this Friday, mainstream high-grade NPI with 10-12% grade rose 16 yuan per nickel unit to close at 1,151 yuan/nickel unit. Stainless steel scrap market, stainless steel scrap prices continued to hold up well this week. Post-holiday geopolitical news drove futures to retreat after rapid rise, but stainless steel spot cargo performed firmly, coupled with high-grade NPI rising in tandem, providing strong cost support. The core driver was that steel mill profits remained moderate with high production schedules, sustaining rigid raw material demand; moreover, steel scrap still held significant cost advantages over NPI, boosting purchase willingness. Although tight tax invoices constrained trader cash flow, bullish sentiment was strong in the market, and scrap prices are expected to hold up well in the near term. As of this Friday, mainstream 304 off-cuts prices in Shanghai rose 250 yuan/mt, with the latest quote at approximately 10,850 yuan/mt. Cost side for chromium-based raw materials, high-carbon ferrochrome prices pulled back slightly overall this week. Although major stainless steel mills raised their steel tender prices for high-carbon ferrochrome in May, ferrochrome planned production remained at high levels. Additionally, south China was gradually entering the normal/rainy season, and ex-China ferrochrome producers were about to resume production, leading to relatively loose ferrochrome supply expectations. Recent ferrochrome transactions were sluggish, and chrome ore inventory reached a multi-year high, with chrome ore prices softening and ferrochrome cost support weakening, leaving prices in the doldrums. As of this Friday, mainstream high-carbon ferrochrome prices in Inner Mongolia fell 25 yuan/mt (50% metal content) WoW to close at 8,450 yuan/mt (50% metal content).

This week, prices of 304 stainless steel scrap off-cuts in east China rose, with the quotation range at 10,800-10,900 yuan/mt; the same-specification stainless steel scrap off-cuts in Foshan also strengthened, with the price range at 10,450-10,750 yuan/mt. From the perspective of raw material production costs, the current cost of producing stainless steel entirely from stainless steel scrap was approximately 15,062.94 yuan/mt, while the cost of production entirely using high-grade NPI reached 15,261.92 yuan/mt. Stainless steel scrap prices strengthened further this week. After the Labour Day holiday, SS futures surged sharply, stimulated by news of easing geopolitical tensions in the Middle East. Although futures subsequently pulled back, spot stainless steel finished products remained firm after the initial spike, highlighting spot resilience. The alternative raw material high-grade NPI also rose in tandem, driving raw material prices higher collectively, with stainless steel scrap prices rising in sync and continuing to hold up well. The core factors supporting further strengthening of stainless steel scrap prices were clearly visible: steel mills currently enjoyed healthy smelting margins with relatively high production enthusiasm, production schedules stayed high, and rigid raw material demand provided solid support. Meanwhile, although the cost advantage of stainless steel scrap over high-grade NPI narrowed somewhat, it still maintained a significant edge, continuously boosting steel mills' purchase willingness. At the industry level, while the issue of tight tax invoices persisted, imposing certain constraints on traders' payment collection, it did not dampen market sentiment, and bullish confidence in the industry remained relatively strong. Overall, the stainless steel scrap market this week exhibited a firm pattern characterized by "futures fluctuations, firm spot prices, and demand support," with various positive factors jointly driving market trends. Although the tax invoice issue existed, it did not significantly constrain the strong price momentum, and stainless steel scrap prices were expected to hold up well in the near term.

This week, prices of 304 stainless steel scrap off-cuts in east China rose, with a quotation range of 10,550-10,650 yuan/mt. In Foshan, the same-specification stainless steel scrap off-cuts also strengthened, with a price range of 10,050-10,450 yuan/mt. From a raw material cost perspective, the current cost of producing stainless steel entirely from stainless steel scrap was approximately 14,761.4 yuan/mt, while the cost using entirely high-grade NPI reached 15,134.31 yuan/mt. Stainless steel scrap prices further strengthened this week. SS futures surged significantly, driven by SHFE nickel's rally amid geopolitical conflicts, which in turn transmitted to the spot market and pushed stainless steel spot prices higher in tandem. The alternative raw material high-grade NPI also rose in sympathy, bullish sentiment continued to build, and stainless steel scrap prices followed suit, maintaining a strong trend. The recent rapid rise in high-grade NPI prices further widened the cost advantage of stainless steel scrap over high-grade NPI. This core competitive edge continued to drive steel mills' preference for stainless steel scrap even amid persistent tax invoice issues plaguing the industry. Meanwhile, smelting margins at stainless steel mills gradually recovered, production enthusiasm remained high, production schedules stayed high, and procurement demand for stainless steel scrap remained solid, providing firm support for price rises. Overall, the stainless steel scrap market this week exhibited a further strengthening pattern characterized by "futures leading, raw material linkage, and demand support." Various supportive factors jointly dominated market trends, and although tax invoice issues persisted, they did not significantly constrain the strong price momentum. Stainless steel scrap prices were expected to hold up well in the near term.