The stainless steel market entered the holiday period with a consolidating pattern, marked by external weakness and internal stability, as expectations for a traditional peak season recovery failed to materialize. End-use demand remained weak, downstream stocking largely wound down ahead of the long holiday, and only sporadic rigid demand transactions remained in the market. Overall trading was sluggish, with spot prices remaining firm despite continued pressure from weak demand. Futures showed resilience, not following the deep declines in nonferrous metals and SHFE nickel, supported by low valuations.
The cost side improved as upstream nickel- and chromium-based raw material prices pulled back, repairing the price spread between finished products and raw materials. Steel mill profits gradually recovered, while supply-side expectations for production cuts built, marginally tightening industry supply. Combined with prices at yearly lows, this limited downside. Inventories shifted from decline to increase, ending the earlier destocking pace. Social inventory accumulated again, and supply pressure in the industry rebounded somewhat.
After the holiday, the stainless steel market is likely to continue moving sideways within a range, with a weak supply-demand tug-of-war pattern. The probability of a one-sided rise or fall is low. The demand side remains the core constraint, with post-holiday production resumptions proceeding gradually, making concentrated restocking unlikely. The supply and cost sides will continue to provide bottom support, with steel mill production cuts being implemented steadily, marginally easing supply pressure, while the decline in raw material prices slows down and steel mill profitability recovers. On the inventory front, the long holiday shutdown halted demand, and short-term inventory buildup pressure after the holiday will persist, continuing to cap the height of any rebound.