[SMM Analysis] SS Decline and Weak Off-Season Trading Keep Stainless Steel Inventory Basically Stable with Slight Buildup SMM, June 25: This week, stainless steel social inventory ended its previous destocking trend, and under off-season conditions, overall inventory stabilized and edged up slightly. Total inventory in the two core markets of Wuxi and Foshan rose slightly, from 932,000 mt on June 18, 2026, to 932,800 mt on June 25, up 0.06% WoW. The inventory shifted from continuous destocking to slight buildup, with off-season inventory pressure becoming marginally apparent. This week, the stainless steel market was fully in the traditional consumption off-season, with end-user rigid demand support continuing to weaken. During the week, metals futures weakened across the board, coupled with news-related disturbances from Indonesia. SS futures drifted lower, bearish sentiment in the market intensified, downstream end-users became more wait-and-see, overall purchasing willingness was insufficient, and spot market trading remained weak. This week, news of maintenance and production cuts at steel mills continued to simmer, with some mills reducing shipments, leading to a marginal decline in market supply. Meanwhile, traders, amid pessimistic expectations, showed low willingness to actively purchase, and generally adopted strategies of selling at lower margins and reducing inventory to accelerate the turnover of goods on hand. This largely offset the inventory buildup pressure from weak off-season demand, keeping overall social inventory basically stable with only a slight increase. Overall, the core factors behind the shift from destocking to slight inventory buildup this week were weak end-user rigid demand during the off-season and weakening futures dampening market sentiment. Meanwhile, supply contraction from steel mill maintenance and traders' proactive destocking provided critical support to prevent a pronounced inventory buildup. At this stage, the market's off-season characteristics are increasingly evident...

The Government of Japan formally announced plans to deploy steep anti-dumping duties targeting imports of nickel-containing cold-rolled stainless steel coils, sheets, and strips from China and Taiwan, effective as early as next month. Following a detailed trade investigation launched in July 2025 after joint industrial complaints from Nippon Steel and Nippon Yakin Kogyo, authorities confirmed that the products were sold at artificially low dumped margins. Ad valorem penalty rates will reach up to 45% for Chinese shipments (including TISCO and POSCO PZSS) and up to 21% for Taiwanese goods

POSCO said Wednesday it streamlined its product line into eight 'strategic steels' run under a new 'One Team' structure that breaks internal divisional silos, with each team handling the full chain from R&D to sales. The eight include stainless steel for next-generation growth markets, PosMAC, high-manganese steel, premium EAF steel, energy heavy plates, electrical steel, GigaSteel and HyperNO. Pohang will anchor energy steels—including high-strength stainless—while Gwangyang focuses on automotive and new-mobility grades. POSCO framed the revamp as a response to rising low-priced imports into Korea and trade barriers abroad, after US tariffs cut its US exports 8% year-on-year, and tied it to Korea's new K-Steel Act—signaling a pivot toward premium specialty products, stainless among them.

Indian stainless steel MSMEs and industry bodies flagged a sharp jump in imports after a quality-control (QCO/BIS) exemption lapsed, urging the government to reinstate the Quality Control Order. Citing official data, they said stainless imports hit 101,252 mt in April 2026, up 65% from 61,143 mt a year earlier and 69% above March's 59,917 mt, and warned volumes could climb further without intervention. The exemption—covering 200- and 300-series flat products (standards IS 6911, IS 5522, IS 15997) for shipments loaded by 31 March 2026—was meant to ease MSME raw-material access but is seen as enabling cheap, often Chinese, inflows. Reinstating the QCO would tighten 200/300-series flat imports and adds to New Delhi's broader steel-protection push.

Under the EU's new steel trade regime, importers must prove the 'country of melt and pour'—where steel or iron was first produced in liquid form and cast into its first solid state—to improve supply-chain traceability. Evidence such as a mill test certificate is required from 1 October 2026; melt-and-pour data will feed into country quota distribution from 1 October 2027; and by 30 June 2028 the Commission will assess whether to make melt-and-pour the basis for quota eligibility, possibly via a legislative proposal. The rule targets origin-washing, raising the cost of routing non-EU steel—including Chinese stainless—through third countries to dodge quotas and duties.

The EU's new steel trade regime (Regulation 2026/1384) applies from 1 July 2026, replacing the 2019 safeguard that expires 30 June and lifting the out-of-quota duty to 50% from 25%. Within an 18.35 million-tonne total annual tariff-rate quota, stainless gets category-specific caps: cold-rolled sheets and strips 496,342 t, hot-rolled sheets and strips 153,186 t, hot-rolled quarto plate 17,025 t, bars and light sections 133,595 t, wire rod 40,462 t, and seamless tubes and pipes 32,967 t—about 873,577 t of stainless in total. Quotas run 1 July–30 June and are administered quarterly. Once a category's quota fills, further imports face the 50% duty, double the prior 25% penalty, tightening access for non-EU stainless.

Japan preliminarily determined to impose anti-dumping duties on nickel-bearing cold-rolled stainless steel coil, sheet and strip from China and Taiwan, after finding the imports were dumped and caused material injury to domestic producers. Trade minister Ryosei Akazawa said rates could reach about 45% for Chinese goods and about 21% for Taiwanese goods, with duties possibly taking effect as soon as July. The case, jointly run by METI and the Finance Ministry, began in July 2025 on a complaint led by Nippon Steel and Nippon Yakin Kogyo. China supplies about 20% of Japan's steel-product imports and Taiwan 17%. The measure would close an export outlet for Chinese and Taiwanese 300-series CR stainless amid global overcapacity, likely diverting tonnage to Southeast Asia and other markets.

[SMM Stainless Steel Daily Review] SS Futures Extended Decline, Stainless Steel Spot Followed Lower with Sluggish Trading According to SMM on June 25, SS futures extended their decline and weakened. Non-ferrous metals futures continued their downtrend, and combined with the impact of yesterday’s Indonesian nickel ore quota news, SS futures fell further. As of the midday close, the most-traded SS contract settled at 14,640 yuan/mt. In the spot market, pressured by the ongoing decline in futures and the arrival of the traditional consumption off-season, the sluggish trading situation was hard to reverse, and traders showed a strong willingness to sell. Although a mainstream stainless steel mill kept its guidance price unchanged in the morning, spot quotes still fell along with futures, and trading remained sluggish. The most-traded SS futures contract. At 10:15 AM, SS2608 was reported at 14,600 yuan/mt, down 140 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the 370-970 yuan/mt range. In the spot market, the average price of cold-rolled 201/2B coil remained flat; cold-rolled 304/2B coil with mill edge saw its average price fall by 50 yuan/mt in Wuxi and 50 yuan/mt in Foshan; cold-rolled 316L/2B coil in Wuxi dropped by 100 yuan/mt; hot-rolled 316L/NO.1 coil in Wuxi fell by 50 yuan/mt; cold-rolled 430/2B coil in both Wuxi and Foshan held steady. This week, stainless steel futures and spot swung wildly. Macro expectations outside China repeatedly disrupted the futures, intensifying the tug-of-war between longs and shorts in the market. Overall, the pattern was one of macros driving futures trends, trading fluctuating with sentiment, supply tightening supporting spot, inventory remaining stable, and profits seeing a minor recovery...

SMM, June 25: Metal markets: As of the noon close, base metals on the domestic market fell across the board, with SHFE copper down 1.82%, SHFE aluminum down 2.75%, SHFE lead down 0.7%, SHFE zinc down 1.64%, SHFE nickel down 0.92%, and SHFE tin down 1.76%. Additionally, the most-traded cast aluminum futures fell 2.08%, the most-traded alumina contract fell 1.29%, the most-traded lithium carbonate contract fell 1.75%, the most-traded silicon metal contract fell 0.29%, and the most-traded polysilicon futures rose 0.33%. Ferrous metals mostly rose, with only stainless steel down 0.75%. Iron ore rose 0.2%, rebar rose 0.1%, and hot-rolled coil edged up. In the coking coal and coke segment: the most-traded coking coal contract inched up 0.08%, and the most-traded coke contract rose 0.28%. In overseas base metals, as of 11:38, LME metals rose across the board. LME copper rose 0.82%, LME aluminum rose 0.24%, LME lead rose 0.6%, LME zinc rose 0.31%, LME tin rose 2.02%, and LME nickel rose 0.77%. In precious metals, as of 11:38, COMEX gold fell 0.48%, and COMEX silver fell 2.02%. In domestic precious metals: SHFE gold declined 2.81%, hitting an intraday low of 868.34 yuan/g; the most-traded SHFE silver contract fell 7.1%, with an intraday low of 13,560 yuan/kg. Additionally, as of the noon close, the most-traded platinum futures fell 4.39%, and the most-traded palladium futures fell 3.54%. As of the noon close, the most-traded containerized freight index (Europe) futures fell 2.45% to 3,665.5 points. As of 11:38 on June 25, midday quotes for selected futures: Spot and fundamentals Silver: In the spot market, downstream consumption recovered somewhat after silver continued to decline. Morning quotes in Shanghai were mainly at TD parity to +20 yuan/kg... Macro front Domestic front: [China's power generation capacity exceeds 4 billion kW] On June 25, the National Energy Administration announced that as of the end of May 2026, China's power generation capacity reached 4.01 billion kW, ranking first globally. Non-fossil energy capacity became the absolute mainstay of capacity additions, and the energy mix continued to improve. The share of coal-fired power capacity fell from 61% in 2010 to 32% in May 2026; the share of non-fossil energy capacity rose from 25% in 2010 to 62% in May 2026; and the share of renewable energy capacity rose from 24% in 2010 to 61% in May 2026. (Xinhua) [PBOC reverse repo net injection of 322.5 billion yuan today] The PBOC conducted 370.5 billion yuan of 7-day reverse repos and 500 billion yuan of 1-year medium-term lending facility (MLF) operations today. With 300 billion yuan of 1-year MLF and 248 billion yuan of 7-day reverse repos maturing today, this resulted in a net injection of 322.5 billion yuan. ((Jin10 Data APP) US dollar: As of 11:38, the US dollar index fell 0.07% to 101.51. All large US banks passed the Fed's annual stress test, paving the way for banks to boost share buybacks and dividends by tens of billions of dollars. The stress test aims to assess how Wall Street lenders would fare under hypothetical financial system shocks. Unlike in previous years, the 2026 test results will not affect capital requirements, as the Fed is continuously revising the test to make it more friendly to banks. This year's test examined how 32 large lenders would withstand a severe global shock amid greater stress in commercial and residential real estate markets and corporate debt markets. The hypothetical scenario included a severe global recession, a 39% drop in commercial real estate prices, and a 30% decline in residential prices. The unemployment rate also surged to a peak of 10%, with a corresponding decline in economic output. The regulators said, "Despite absorbing over $708 billion in loan losses under this year's hypothetical scenario, total capital fell by just 1.6 percentage points, still above the minimum capital requirement." According to CME FedWatch, the probability that the Fed keeps rates unchanged in July is 65.8%, while the chance of a cumulative 25bp rate hike is 34.2%. By September, the probability of rates remaining unchanged is 33.6%, of a cumulative 25bp hike is 49.7%, and of a cumulative 50bp hike is 16.7%. US Treasury Secretary Bessent praised Fed Chairman Warsh for eliminating forward guidance, and said no one should make dot plot forecasts. On the economy, he expects real wage growth to return to the pace seen before April and expects the economy to accelerate for the rest of the year without fueling inflation. He stressed that the dominance of the US dollar is crucial. He believes that once the situation in Ukraine is over, Russia will want to return to the dollar system, while a new Venezuela is returning to that system. During a period of rate cuts, the dollar can still remain strong, and the US is willing to take the right measures to keep the dollar strong. (Jin10 Data APP) On the data front: Today will see the release of Australia's May seasonally adjusted unemployment rate, Germany's July GfK Consumer Confidence Index, US initial jobless claims for the week ending June 20, US May core PCE price index year-on-year, US May personal spending month-on-month, the final reading of US Q1 real GDP annualized quarter-on-quarter, the final reading of US Q1 real personal consumption expenditures quarter-on-quarter, the final reading of US Q1 core PCE price index annualized quarter-on-quarter, US May core PCE price index month-on-month, US May durable goods orders month-on-month, and other data. Additionally, attention should be paid to: Nvidia's annual shareholder meeting; the Bank of Canada's release of monetary policy meeting minutes; the US Federal Reserve's release of annual bank stress test results; Bank of Japan Governor Ueda Kazuo's attendance at a central bank lecture event hosted by the International Monetary Fund (IMF); Micron Technology's fiscal 2026 Q3 earnings call; and 300 billion yuan in 1-year medium-term lending facility (MLF) and 248 billion yuan in 7-day reverse repos maturing today. Crude oil: As of 11:38, oil prices on both exchanges continued to decline, extending losses from the previous three trading days, with WTI falling 1.69% and Brent falling 1.53%. Oil prices pulled back their wartime gains on Thursday as the market bet on improving global crude supply, with tankers that had been stranded in the Persian Gulf for months beginning to sail out of the Strait of Hormuz. According to data from maritime analytics firm Kpler, more than 20 tankers carrying approximately 35 million barrels of crude oil have passed through the Strait of Hormuz since a US-Iran agreement reopened this critical shipping lane. These non-Iranian tankers had been stuck in the Persian Gulf for over three months after Tehran effectively blockaded the waterway early in the conflict. Most of these tankers are expected to arrive at Asian destinations by early August. Citigroup stated that the worst may be over for commodity futures carry trade strategies, which suffered massive losses during the US-Iran war as short positions in near-month contracts were hit hard by soaring prices, while long positions in forward contracts were bought. Citi noted that the current base case is for significant de-escalation, and predicts that as Strait of Hormuz shipping normalizes, Brent crude prices will fall to $60-$65 per barrel over the next 6 to 12 months. (Jin10 Data APP) Spot market overview: ► ► ► ► ► ► ► ► ► ► ► ► ► ►

The European Commission published Regulation (EU) 2026/1384, establishing the EU steel trade regime that takes effect 1 July 2026 and replaces the safeguard measures expiring 30 June. The new framework sets annual tariff-rate quotas of 18.3 million mt with a 50% out-of-quota duty, and adds a melt-and-pour origin requirement to curb circumvention. Crucially, the country-specific quota allocations are not yet set: they will come via a separate implementing act that has not been published, even as talks with several FTA partners reportedly continue. The gap leaves importers and supply chains uncertain about how the quota system will function from day one, with stainless mills among those watching the final country splits.