SMM data shows that overseas stainless steel prices saw their first correction after six months of gains during May 18–22. Indonesia’s leading mills cut FOB 300 series stainless steel by USD30/mt, then kept prices stable through out the week. Policy-driven supply concerns from Indonesia and IWIP NPI cuts pushed LME nickel above USD 18,800/mt. The market focus shifted from price weakness to cost support, while demand remained resistant to high prices.

According to SMM survey data, China's stainless steel production in May 2025 declined slightly by 1.04% MoM and increased by 6.34% YoY. Production across different series showed significant divergence: the 200 series saw a 4.82% MoM decrease in production; the 300 series experienced a slight 0.05% MoM decline; and the 400 series registered a 1.44% MoM increase in production. Despite stainless steel production hitting a record high in March and subsequent consecutive pullbacks in April and May, the overall supply scale remained elevated. During May, stainless steel smelting continued to face the dilemma of cost-profit losses. As macro disturbances faded by mid-month, market focus shifted back to fundamentals, revealing weak downstream demand and an overall market in the doldrums, intensifying competition among steel mills. However, influenced by production inertia and the boost from favourable macro conditions in early May, which led to improved spot transactions, the extent of production cuts in the month was limited. In terms of the performance of different series, the 300 series maintained relatively stable production, while the previously increased production of the 200 series declined significantly. Despite the 300 series stainless steel still experiencing cost losses, as high-grade NPI prices bottomed out during the month, production costs continued to decline, alleviating the extent of losses for steel mills. Meanwhile, futures-spot arbitrage activities spurred by fluctuations in the futures market pulled down the actual transaction price of 300 series stainless steel, with spot cargo transactions at low prices showing moderate performance. In contrast, for the 200 series stainless steel, the concentrated production shift by steel mills in the early stage led to a surge in supply, but no significant improvement was seen in downstream demand, resulting in a severe supply-demand imbalance and a sharp price decline, prompting steel mills to actively reduce 200 series production. Looking ahead to June, the stainless steel market will officially enter the traditional consumption off-season. As macro disturbances ease temporarily, market operation logic will revert to being dominated by supply and demand fundamentals. Previously impacted by the US tariff policy, stainless steel futures prices plummeted. Currently, the market continues to face a situation intertwined with supply surplus, weak demand, and pessimistic sentiment, with futures prices fluctuating at lows, subsequently driving spot prices down to recent lows. Despite some enterprises initiating production cuts in May, the industry's overall production remains at historically high levels. Under the multiple pressures of increasing external demand uncertainty, sluggish domestic demand, and insufficient market confidence, the profit margins of stainless steel enterprises have been severely compressed. It is expected that more steel mills will implement production cuts and maintenance plans in June, with the industry's overall production expected to decline further, thereby alleviating the current severe supply-demand imbalance.

[5.23 Morning Meeting Minutes] Cost side, LME nickel has returned to fundamentals and is in the doldrums, leading to a slight decline in the production costs of nickel salt smelters. Demand side, the overall demand for nickel salt in June is expected to strengthen. Recently, the activity of precursor plants inquiring about nickel salt prices has significantly increased, and their purchase willingness has strengthened. Supply side, some nickel salt smelters have maintained stable quotes, while others have raised their quote coefficients due to increased demand and limited raw material inventory.

[SMM Stainless Steel Daily Review: Persistent Supply-Demand Mismatch in Stainless Steel Market, Sluggish Trading Due to Insufficient Downstream Demand] SMM reported on May 22 that today, the SS futures market continued to exhibit a fluctuating trend. As the earlier favourable macro front gradually faded and the traditional peak consumption season neared its end, the purchasing demand released by downstream end-users due to stimulus policies had largely been met. Meanwhile, the overall production cuts in the stainless steel sector remained limited, with market supply remaining high and the availability of goods continuing to be loose, resulting in sluggish trading in the spot market. To alleviate the pressure of shipping goods, agents and traders adopted a strategy of offering minor concessions. Notably, stainless steel producers had previously adjusted their production structure by reducing capacity for 300 series stainless steel and increasing production for 200 series and 400 series stainless steel. However, the downstream demand structure had not changed accordingly. This led to a significant increase in the supply of 200 series stainless steel in the market, resulting in a sharp rise in sales pressure. Affected by this, Tsingshan Group lowered the plate price of 200 series stainless steel today, further reflecting the intensified supply-demand imbalance faced by this category. In the futures market, the most-traded contract 2507 fluctuated upward slightly. At 10:30 a.m., SS2507 was quoted at 12,875 yuan/mt, up 5 yuan/mt from the previous trading day. In the Wuxi region, the spot premiums/discounts for 304/2B stainless steel ranged from 345-595 yuan/mt. In the spot market, the cold-rolled 201/2B coils in Wuxi and Foshan were both quoted at 8,100 yuan/mt; the cold-rolled trimmed 304/2B coils had an average price of 13,175 yuan/mt in Wuxi and 13,175 yuan/mt in Foshan; the cold-rolled 316L/2B coils in the Wuxi region were quoted at 2...

【Minutes of the Morning Meeting on May 7】In April, the production of MHP in Indonesia was significantly affected by floods, resulting in a gap between supply and demand and keeping its coefficient firm at highs. Overall, MHP has strong cost support. Supply side, some nickel salt smelters have limited quantities available for external sale in the remaining days of May, leading to firm quotations. Some nickel salt smelters have expectations for production cuts due to incomplete raw material stocking. Moreover, the current raw material prices are fluctuating at highs, driving up their prices.

According to SMM survey data, China's national stainless steel production reached 3.5123 million mt in April 2025, down slightly by 1.91% MoM and up by 10.4% YoY. Among this, the production of 200 series stainless steel was 944,500 mt, up by 3.11% MoM; the production of 300 series stainless steel was 1.8749 million mt, down by 4.19% MoM; and the production of 400 series stainless steel was 693,800 mt, down by 2.12% MoM. Following the conclusion of annual routine maintenance and the off-season for consumption in January-February, the stainless steel market entered the traditional peak season of "golden March and silver April," with March production exceeding 3.4 million mt, a record high. Despite a pullback in April production, it remained at a high level. However, in early April, the US significantly increased tariffs on Chinese goods, triggering severe market volatility. Stainless steel futures prices plummeted, with the spot market quickly following suit. Cost-profit margins for some categories severely inverted, leading to significant changes in the market landscape. In terms of the performance of different series, 300 series stainless steel was the most severely impacted. Although high-grade NPI prices also pulled back simultaneously, the decline was significantly less than that of 300 series stainless steel prices, exacerbating smelting losses. To cope with losses, multiple enterprises planned to reduce 300 series production and instead increase production of 200 series and 400 series products. In contrast, the price decline for 200 series stainless steel was relatively small, and the short-process technology using stainless steel scrap as a raw material still maintained profitability, driving production growth against the trend in April. Although 400 series stainless steel faced rising costs due to tight supply of high-carbon ferrochrome, some enterprises managed costs by leveraging their earlier low-cost raw material inventories, with downstream companies even planning to increase production. Looking ahead to May, although stainless steel mills will adjust production volumes for different steel grades, overall production will remain at a relatively high level. With the conclusion of the traditional peak consumption season of "golden March and silver April," coupled with the ongoing impact of US tariff policies, wait-and-see sentiment in the market is intensifying, with downstream customers primarily purchasing to meet immediate needs. Driven by futures prices, stainless steel spot prices continue to operate at low levels. Among them, the issue of losses for 300 series stainless steel is particularly prominent, driving a clear trend for enterprises to switch to producing other steel grades. Although prices for high-grade NPI and high-carbon ferrochrome have already declined, the scope for further decreases is relatively limited, and their price declines are less than those of finished stainless steel products. Although stainless steel scrap has certain cost advantages, its supply scale is constrained, making it fundamentally unable to effectively alleviate the cost pressures faced by stainless steel enterprises. It is expected that in the future, as the pressures from losses and weak demand intensify further, stainless steel enterprises will further optimize their production strategies to better cope with the dual challenges of costs and demand.

【3.25 Morning Meeting Minutes】In Indonesia, nickel ore mining and output fell short of expectations. Some smelters' raw material inventories were at low levels, and some production lines in the main producing areas operated at low capacity. Although new capacity was released, the increase in production was relatively limited. Demand side, spot stainless steel performance was relatively weak, and the price of stainless steel scrap as a raw material decreased, restoring some economic advantages, which put pressure on the price of high-grade NPI. However, from the cost and market circulation resources perspective, high-grade NPI is expected to remain stable in the short term.

[3.25 Morning Meeting Summary] In Indonesia, nickel ore mining and output were below expectations, with some smelters having low raw material inventory levels. Additionally, some production lines in the main producing areas operated at low capacity. Despite the release of new capacity, the increase in production was limited. Demand side, the spot stainless steel market performed weakly. With a decline in the price of stainless steel scrap, the cost advantage has somewhat recovered, putting pressure on high-grade NPI prices. Today, a stainless steel mill in South China announced a tender price significantly higher than the previous one. In the short term, it is expected that high-grade NPI will remain stable.

[3.13 Morning Meeting Summary] On March 12, the SMM 8-12% high-grade NPI average price was 1,000 yuan/mtu (ex-factory, tax included), up by 2.5 yuan/mtu compared to the previous working day. Supply side, domestically, as the Philippines approaches the end of the rainy season, nickel ore output remains relatively tight. Ore prices are stable, smelters' production motivation is weak, and production remains at low levels. In Indonesia, some production lines in major producing areas have not shown significant recovery. Coupled with lower-than-expected nickel ore supply, overall production remains stable.

[SMM Stainless Steel Spot Daily Review: Stainless Steel Market Futures and Spot Linkage, Price Fluctuations Amid the Tug-of-War Between Supply and Demand] On February 21, during the week in the stainless steel market, the electronic May contract saw active trading, with futures prices first declining and then rebounding. This was driven by factors such as disruptions at Indonesian nickel-iron plants, maintenance at Beigang Xincai, and a recovery in macro sentiment, leading to a rise in the closing price on the 21st. In the spot market, prices for different series increased across the board, with the 300 series seeing the largest gains, followed by the 400 series. Although downstream demand was released slowly, the futures market momentum and changes in supply pushed spot prices higher. Market participants need to monitor subsequent supply and demand dynamics to adjust their strategies.