When Can the Stainless Steel Market Turn Around?

Recently, the stainless steel futures market has experienced a decline, with no significant improvement in market demand, and social inventory remains difficult to digest. The current trend of stainless steel prices is weak. When will this situation turn around?

Futures Market Fluctuates Downward

Market performance is not satisfactory. Recently, the stainless steel futures market has fluctuated downward, and the market is filled with pessimistic sentiment. With the new round of steel mill price adjustments, many spot merchants have followed suit. Downstream companies are cautious and wait-and-see, and transactions are still based on the demand for purchase. The futures market may affect the current market sentiment, and the overall market performance is not good.

Raw Material Prices Support

Although macro factors are weakening, the supply of Indonesian nickel ore is still tight due to the approval process and the rainy season. The smelting cost of Indonesian ferronickel factories is high, and the price of ferronickel is well supported. Domestic trade prices may warm up, but it is still necessary to pay attention to policy changes in the Indonesian industry. At present, steel mills are temporarily unable to accept the purchase of high-priced raw materials and maintain a price-pressing mentality for the purchase of raw materials such as ferronickel.

Supply Contraction Not Significant

From the supply side, the production of stainless steel crude steel in July is 3.2467 million tons, a month-on-month decrease of 1.27%. The production of stainless steel in July may further decline, but the contraction of supply is not significant. In the latest inventory data (as of July 18), the total social inventory of stainless steel in the mainstream national market of 89 warehouses is 1.1087 million tons, a week-on-week increase of 1.94%. The total social inventory of stainless steel in the mainstream national market of 89 warehouses has increased this period, with various series having different degrees of inventory increase. Downstream replenishment operations are cautious, the market is mainly based on the demand for purchase, and the pressure of stainless steel de-stocking still exists.

International Economic Situation is Severe

On the macro level, international precious metal futures generally fell, and most of the basic metals in London closed down. In addition, the Federal Reserve released the Beige Book on the economic situation, which is expected to slow down economic growth in the next six months due to various factors such as elections, policies, and political conflicts. Affected by the international macroeconomic situation, the overall market sentiment is not good.

Summary

In summary, the stainless steel futures market fluctuates downward, downstream demand is still weak, the macroeconomic situation is not good, and the market is full of wait-and-see sentiment. In the short term, the price of stainless steel may operate weakly and steadily. When the current market situation will turn around needs to continue to pay attention to market dynamics, supply and demand conditions, and policy trends.