As September progresses and the Mid-Autumn Festival approaches, the anticipated “Golden September” effect remains elusive. The stainless steel market has seen a downward shift in focus, with overall market sentiment remaining subdued. While recent futures rebounds have been noted, their impact on the spot market has been minimal, and demand is expected to recover slowly once negative sentiments are fully absorbed.
Futures Market and Current Trends
The futures market for 300-series stainless steel has seen some rebound, yet market sentiment remains cautious. With the Mid-Autumn Festival nearing, sellers are eager to offload inventory, but downstream buyers are hesitant, resulting in transactions primarily at lower prices. The 200-series and 400-series stainless steel markets continue to struggle, with prices remaining weak.
Cost and Pricing Dynamics
On the cost front, while Philippine nickel ore prices are holding firm, Indonesian nickel ore supply is tight, maintaining stable prices. The cost support from nickel pig iron remains robust, although current low prices are leading to visible losses for producers.
Inventory and Purchasing Behavior
As of September 12, national stainless steel inventory has decreased to 1,024,388 tons, a 3.54% drop from the previous week. With limited arrivals and weak spot prices, traders are capitalizing on lower prices for stockpiling. Pre-festival purchasing has slightly increased, but transactions are predominantly driven by low-price, essential orders. Overall demand remains lackluster.
Summary
Despite recent rebounds in stainless steel futures, there has been no significant improvement in market demand. Pre-festival inventory replenishment intentions are still uncertain. Short-term spot prices are expected to fluctuate, and ongoing attention to market dynamics, supply-demand conditions, and policy changes will be crucial.