According to the OECD's latest Steel Outlook 2026, global excess steel production capacity is projected to reach 745 million tonnes by 2028 — surpassing total OECD steel output by 319 million tonnes. Planned new capacity additions of 139 million tonnes between 2025 and 2028 represent a 5.7% increase, while demand is forecast to grow at only around 0.9% annually, widening the supply-demand gap. Most new capacity is being built outside OECD countries, frequently with government support — in 2024, Chinese steelmakers received subsidies equivalent to 15 times more relative to total assets than producers elsewhere. OECD member capacity contracted overall, with the UK seeing the sharpest decline at 39.7% between 2021 and 2025, followed by Japan at 7.2%. Export restrictions on scrap metal across 42 countries and rising energy costs linked to Middle East tensions are further weighing on investment and the low-carbon transition.

LME nickel surpassing US$18,000/ton boosted Chinese Taiwan's stainless steel outlook, with producers accelerating into high-value segments and China's futures hitting two-year highs, pointing to stronger Q2 margins. Tata Steel Netherlands was fined €8.5M for emissions breaches its second penalty in 2026. On prices, 304 futures closed at RMB 14,805/ton; Wuxi and Foshan spot cold-rolled held at RMB 14,900/ton; 316L averaged RMB 28,200/ton in Wuxi and RMB 28,250/ton in Foshan; 201 and 430 held at RMB 8,700/ton and RMB 7,800/ton. LME nickel reclaimed US$18,200, with a weaker dollar and Chinese bond issuance expectations providing broad cost support.

[SMM Stainless Steel Daily: SS Futures Rebound to 13,000 yuan/mt, Downstream Struggles to Accept Steel Mills' Price Hikes] SMM, September 1 — SS futures showed resilient performance, continuing yesterday's upward trend and briefly breaking through the 13,000 yuan/mt mark during the session. In the spot market, confidence was boosted by the sustained rise in SS futures, coupled with early price increases from major stainless steel mills, prompting market quotations to follow suit. However, downstream acceptance of high prices remained low, with elevated offers leading to sluggish actual transactions. In the afternoon, traders began offering discounts, improving trading activity. Although the market generally holds bullish expectations for September's stainless steel outlook, end-use demand has yet to recover, keeping downstream players cautious. Futures-wise, the most-traded contract 2510 fluctuated within a range. At 10:30 am, SS2510 was quoted at 12,965 yuan/mt, up 105 yuan/mt from the previous trading day. In Wuxi, spot premiums/discounts for 304/2B ranged between 305-605 yuan/mt. Spot market data showed Wuxi's cold-rolled 201/2B coil averaged 8,100 yuan/mt; cold-rolled trimmed 304/2B coils averaged 13,250 yuan/mt in both Wuxi and Foshan; Wuxi's cold-rolled 316L/2B coils were priced at 25,675 yuan/mt, matching Foshan's level; hot-rolled 316L/NO.1 coils were uniformly quoted at 25,150 yuan/mt in both regions; cold-rolled 430/2B coils in Wuxi and Foshan both stood at 7,450 yuan/mt...