This week, stainless steel spot prices fell slightly more than production costs, further worsening the inversion between stainless steel mill prices and costs. Taking 304 cold-rolled products as an example, based on raw material prices on the day, the full cost profit margin was -1.19% this week; calculated based on raw material inventory costs, the margin was -0.55%. Nickel-series raw material costs, high-grade NPI prices remained in the doldrums this week. Although nickel ore prices are currently holding firm and NPI traders are broadly bullish, SHFE nickel futures have been weak recently, while downstream stainless steel prices have struggled to rise. Stainless steel mills themselves are under heavy cost pressure and have shown low acceptance of high-priced raw materials, resulting in sparse market transactions recently; affected by this, high-grade NPI traders have faced considerable transaction pressure, and the price center edged lower slightly. As of this Friday, high-grade NPI with a grade of 10-12% fell by 2 yuan per nickel unit to 1,081.5 yuan/nickel unit. Stainless steel scrap market, stainless steel scrap prices were stable this week, and the decline in finished stainless steel prices did not transmit to the steel scrap market, while prices of substitute furnace charge also remained stable. Tightness in tax invoices eased, the economic advantage of steel scrap became more evident, and high stainless steel mill production schedules drove higher consumption, lifting market transactions and easing inventory pressure. However, finished product prices struggled to rise, limiting upside room for steel scrap prices, which are expected to remain stable in the short term. As of this Friday, the price of 304 off-cuts in Shanghai rose by 100 yuan/mt, with the latest quote at around 10,150 yuan/mt. Chrome-series raw material costs, high-carbon ferrochrome prices dropped back slightly this week. Although some ferrochrome producers recently reported maintenance and production cuts, and stainless steel production schedules for April remained high, leaving retail spot supply in the ferrochrome market relatively tight, stainless steel mills had built relatively ample ferrochrome raw material inventories earlier. Meanwhile, high port inventories of chrome ore recently caused some loosening in chrome ore spot prices. In addition, ferrochrome capacity has already reached a high level, the rainy season in south China is approaching, and ferrochrome producers outside China are resuming production. With ferrochrome producers lacking confidence in the outlook, ferrochrome prices still faced some downward pressure. As of this Friday, high-carbon ferrochrome prices in Inner Mongolia fell 25 yuan/mt (50% metal content) WoW to 8,625 yuan/mt (50% metal content).

Effective April 22, 2026 (night session on April 21), nickel futures and options are open to overseas participants. First contracts: NI2605 and subsequent futures, with corresponding options. For margin, overseas traders may use USD at a 0.95 discount rate, valued at the daily RMB central parity rate. Account opening is available immediately.

The fundamental challenge in the 304 stainless steel industrial chain is Instrument Asymmetry, a scenario where the dominant cost driver, Nickel Pig Iron (NPI), lacks a direct futures contract and forces participants to manage 75% of their risk using standardized proxies like pure nickel. This creates a lethal threat not from price volatility itself, but from the Basis Risk that occurs when physical assets and hedging tools decouple.

[SMM Stainless Steel Daily Review] SS Futures Weakened on Last Trading Day Before Holiday, Stainless Steel Spot Prices Remain Stable Awaiting Post-Holiday Resumption SMM, February 13: SS futures continued to decline and probe lower. On the last trading day before the Chinese New Year holiday, nonferrous metals futures collectively came under pressure and fell, with SS futures also weakening in sync, ultimately closing at 13,860 yuan/mt. In the spot market, despite the volatility in SS futures and rising high-grade NPI prices ahead of the holiday, most spot traders had already entered the holiday period, logistics and transportation were suspended, transactions were sparse, and prices maintained a stable trend, with the market quietly awaiting the post-holiday resumption. The most-traded SS futures contract pulled back. At 10:30 a.m., the SS2604 contract was quoted at 13,765 yuan/mt, down 315 yuan/mt from the previous trading day. In Wuxi, the spot premiums/discounts for 304/2B were in the range of 405-605 yuan/mt. In the spot market, the average price for cold-rolled 201/2B coil in Wuxi was reported at 8,500 yuan/mt; for cold-rolled mill-edge 304/2B coil, the average price in Wuxi was 14,100 yuan/mt, while in Foshan it was 14,050 yuan/mt; in Wuxi, the price for cold-rolled 316L/2B coil was 26,600 yuan/mt, and in Foshan it was also 26,600 yuan/mt; for hot-rolled 316L/NO.1 coil, the price in Wuxi was reported at 25,750 yuan/mt; in both Wuxi and Foshan, the price for cold-rolled 430/2B coil was 7,800 yuan/mt. On the futures side, driven by weakening macro influences and narrowing fluctuations in nonferrous metals futures, the market showed a relatively stable and fluctuating trend at the beginning of the week, with trading activity experiencing a pullback. As the Chinese New Year holiday approached, market participants considered avoiding holiday risks, coupled with earlier...

This week, stainless steel spot prices remained stable, but production costs increased, further narrowing the profit margins of stainless steel mills. Taking 304 cold-rolled products as an example, based on the raw material prices of the day, the full cost profit margin fell to -0.58% this week; if calculated using the cost of raw material inventory, the margin reached 1.78%. On the cost side for nickel-based raw materials, SHFE nickel futures were driven higher mid-week by news of nickel mine approvals in Indonesia; high-grade NPI rose in tandem with the movement in SHFE nickel futures and expectations of tight nickel ore supply, which revived trading activity in the market as the Chinese New Year holiday approached—even though stainless steel mills had largely completed their procurement and stockpiling, traders held strong bullish sentiment. As of Friday this week, the price of high-grade NPI with 10-12% grade increased by 21.5 yuan per mtu, settling at 1,051.5 yuan/mtu. In the stainless steel scrap market, with the Chinese New Year holiday approaching, trading at scrapyards gradually halted as merchants closed for the holiday, leading to a complete suspension of market activity and stable prices. Although stainless steel scrap holds an economic advantage over high-grade NPI, this advantage has not yet translated into price movements; although SS futures strengthened on news related to Indonesian nickel mines, the impact on the stainless steel scrap market was limited. Trading in February is expected to remain stagnant, with the key focus after the holiday being the pace of demand recovery; the market overall maintains optimistic expectations. As of Friday this week, the price of 304 off-cuts in Shanghai remained steady, with the latest offer around 9,650 yuan/mt. On the cost side for chromium-based raw materials, high-carbon ferrochrome prices continued their stable trend this week. As the Chinese New Year holiday approached, most stainless steel mills had completed their stockpiling, and trading of high-carbon ferrochrome essentially stalled; given that current prices are already at high levels, they are expected to remain stable before the holiday. As of Friday this week, the price of high-carbon ferrochrome in Inner Mongolia held steady WoW, settling at 8,550 yuan/mt (50% metal content).

[SMM Stainless Steel Daily Review] SS Futures Pull Back Again, Stainless Steel Spot Market Trading Halts Pre-Holiday SMM, February 12: SS futures ended their previous strengthening trend and fluctuated downward during the day, closing at 13,970 yuan/mt. In the spot market, despite intra-week fluctuations in futures and rising high-grade NPI prices, most spot traders were already on holiday, logistics were suspended, and prices saw little significant change, with daily quotations remaining stable. The most-traded SS futures contract fell. At 10:30 a.m., the SS2604 contract was quoted at 14,080 yuan/mt, up 70 yuan/mt from the previous trading day. In Wuxi, the spot premium/discount for 304/2B was in the range of 90–290 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coil in Wuxi was 8,500 yuan/mt; the average price of cold-rolled edged 304/2B coil was 14,100 yuan/mt in Wuxi and 14,050 yuan/mt in Foshan; the price of cold-rolled 316L/2B coil was 26,600 yuan/mt in Wuxi and 26,600 yuan/mt in Foshan; the price of hot-rolled 316L/NO.1 coil was 25,750 yuan/mt in Wuxi; the price of cold-rolled 430/2B coil was 7,800 yuan/mt in both Wuxi and Foshan. On the futures side, driven by weakening macro influences and narrowing fluctuations in nonferrous metal futures, the market showed a relatively stable fluctuation trend at the beginning of the week, with trading activity pulling back. As the Chinese New Year holiday approached, market participants adopted a wait-and-see attitude due to risk aversion and the fact that previous bullish factors had largely been realized. Mid-week, stimulated by news of Indonesian nickel mine approvals being finalized, SHFE nickel futures…

This week, stainless steel spot production costs pulled back in sync, narrowing steel mills' profit margins. Taking 304 cold-rolled products as an example, based on raw material prices on the day, the full cost profit margin fell to -0.51% this week; if calculated using raw material inventory costs, it reached 3.16%. On the nickel-based raw material cost side, SHFE nickel futures pulled back this week. Driven by arbitrage operations between futures and spot, low-priced spot cargoes were sold off intensively, causing high-grade NPI spot prices to pull back quickly at the start of the week. Subsequently, SHFE nickel stopped falling and rebounded, and high-grade NPI prices recovered accordingly. However, as the Chinese New Year holiday approached, actual market transactions remained sluggish. As of Friday this week, high-grade NPI with 10-12% grade fell 14 yuan per mtu, closing at 1,040 yuan/mtu. In the stainless steel scrap market, stainless steel scrap prices weakened with the market this week. Approaching the Spring Festival, traders gradually began holidays, and pre-holiday stockpiling was largely completed; futures fluctuations transmitted to the spot market, with stainless steel finished products and high-grade NPI prices pulling back, driving down stainless steel scrap prices. Wait-and-see sentiment was strong, and transactions were sluggish. Looking ahead, the decline in stainless steel production schedules in February will suppress demand, but scrap steel's economic efficiency still provides support. Additionally, with the post-holiday "Golden March, Silver April" peak consumption season approaching, the market maintains bullish expectations for the future. As of Friday this week, Shanghai 304 off-cuts prices fell 100, with the latest offer around 9,650 yuan/mt. On the chrome-based raw material cost side, high-carbon ferrochrome prices continued to hold steady this week. Most stainless steel mills had completed pre-holiday stockpiling, and transactions in the high-carbon ferrochrome market were relatively sluggish. Stainless steel production fell significantly in February, leading to a pullback in demand for high-carbon ferrochrome; however, supported by high steel tender prices and chrome ore prices holding up well, ferrochrome prices remained stable for the time being. As of Friday this week, high-carbon ferrochrome prices in Inner Mongolia held steady WoW, closing at 8,550 yuan/mt (50% metal content).

Nickel prices remained weak, with SHFE nickel futures fluctuating downward. The most-traded contract closed 0.92% lower at 118,570 yuan/mt. The prices of laterite ore from the Philippines remained firm at the ore end, but high-priced ore continued to squeeze the profits of mid- and downstream products, leading to a certain deviation between the trends of nickel ore and the futures market. Nickel prices have continued to weaken recently, approaching the cost of pyrometallurgy and compressing the profits of nickel enterprises. However, there have been no large-scale production cuts by enterprises so far, and the supply surplus situation has not significantly eased. The nickel ore market has been relatively quiet, with ore prices remaining stable. It is expected that nickel ore resources for July will start to be sold this week. In the Philippines, mines are mostly adopting a wait-and-see attitude and are cautious in quoting prices. Some downstream iron plants have entered the raw material procurement and stockpiling period, but due to profit losses, they are not highly willing to accept excessively high nickel ore prices. In Indonesia, the shortage of nickel ore supply persists, with declining ore grades and high prices for high-grade ore remaining. The domestic trade benchmark price for June (Phase II) is expected to fall by approximately $0.3-0.5. The current domestic trade premium remains at 26-28, and subsequent premiums will enter a negotiation period. The end-use demand for new energy is in the off-season, with production schedules for ternary cathode materials in June declining. Battery manufacturers have previously stockpiled sufficient raw materials, resulting in low procurement demand. Nickel sulphate prices have remained firm, maintaining a relatively high level. The tight supply situation for intermediate products at the raw material end continues, with intermediate product prices remaining firm. However, with some nickel iron production lines currently switching to produce nickel matte, the tight supply situation for intermediate products may improve, putting pressure on further nickel sulphate price increases. Downstream ternary cathode manufacturers are not highly willing to accept high-priced nickel sulphate, and with demand remaining weak, nickel sulphate continues to face pressure. In the short term, supported by nickel sulphate costs, industrial profits remain low, and prices are maintained at cost-based pricing levels. Regarding the outlook, Jinrui Futures commented that with the resource end being suppressed by stainless steel, the driving force for cost increases in Class 1 nickel has weakened. Meanwhile, as Indonesia's supply-side policies have become more stable, the sustainability of additional support for Class 1 nickel demand in H2 is in question. The driving force for nickel price increases has weakened, while there is still cost support on the downside. Anchoring on the cost of pyrometallurgical electrodeposited nickel, the price range may converge.

This week, nickel prices showed a slight upward trend. In the spot market, the average price of SMM1# refined nickel rose from 122,850 yuan/mt at the beginning of the week to 123,400 yuan/mt, marking a 0.4% increase. The premium for Jinchuan nickel remained within the range of 2,300-2,600 yuan/mt this week, with relatively small changes. Affected by the stable fluctuations in nickel futures prices and weak downstream demand, trading in the spot refined nickel market was sluggish this week. In the futures market, the most-traded SHFE nickel contract (NI2507) closed at 122,200 yuan/mt, up 0.93%. LME nickel prices outperformed the domestic futures market, closing at $15,495/mt this week, up 1.24%. On the macro front, the US ADP employment figure for May increased by 37,000, the lowest level since March 2023 and far below the expected 114,000. The previous figure was 62,000. This number was 5 standard deviations away from the expected value, representing the largest miss since August 2022. Following the data release, investors' expectations for future interest rate cuts rose sharply. Domestically, to maintain ample liquidity in the banking system, the People's Bank of China (PBOC) will conduct 1,000 billion yuan of outright reverse repo operations this week through fixed-quantity, rate-based tenders with multiple price awards, with a term of 3 months (91 days). In terms of inventory, the inventory in the Shanghai Bonded Zone was approximately 5,000 mt this week, unchanged WoW. Domestic social inventory stood at around 39,400 mt, experiencing destocking of approximately 2,178 mt WoW. Domestic inventory fell below the 40,000 mt level, alleviating inventory pressure. This week, nickel prices stabilized amid fluctuations, with cost support and policy expectations providing underlying resilience. However, inventory pressure stemming from the surplus in the fundamental market still constrained upside room. A breakthrough in the market outlook will depend on clarity in Indonesia's nickel ore policies or unexpected supply-side contractions. In the short term, the lower bound of fluctuations is seen at 115,000 mt, while the upper bound faces pressure at 123,000 mt.

The sharp fluctuations in nickel prices in May were mainly due to macro disturbances. After excluding abnormal disturbances in the candlestick, SHFE nickel futures prices mainly showed a slow decline under the dual pressures of "weak fundamentals" and "high inventory".