Market Summary

This week, China’s stainless steel market moved higher, mainly driven by strong nickel prices. The key trigger is the market expectation that Indonesia will cut nickel ore quotas, which could tighten global supply. As nickel is the core raw material for stainless steel, rising nickel prices directly pushed stainless steel prices upward.

At the futures market, trading volume stayed extremely high and open interest kept increasing, showing strong market participation and speculation. The main stainless steel contract closed at 14,275 RMB/ton, up 2.99% week-on-week, with a weekly high of 14,620 RMB/ton.

For international buyers, this means:

  • Raw material pressure is increasing.

  • Short-term stainless steel prices are supported by cost and supply factors.

  • Buying too late may face higher prices if nickel stays strong.

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1. Spot Market: Prices Up, Buyers More Cautious

In the physical market, stainless steel spot prices rose about 400 RMB/ton this week, following futures. However, higher prices made downstream buyers more cautious. Real demand has not clearly recovered, and many buyers are only purchasing for urgent needs.

Key points from the spot market:

  • Prices keep rising, but transactions (physical deals) are weaker.

  • Traders are cautious and not aggressively stocking, waiting for clearer policy signals on Indonesian nickel.

  • Social inventory continues to fall, mainly because steel mills slowed production and deliveries are limited.

  • Tight supply supports prices, even though demand is still in the off-season.

For overseas importers, this means Chinese suppliers may have:

  • Less available stock for quick shipment.

  • Stronger pricing attitude due to falling inventories.

2. Cost and Policy Factors

Raw material prices, especially nickel, continued to rise, pushing up steel mills’ production costs. Even so, mills still have some profit, so there is no strong motivation to cut production sharply.

On the macro side:

  • China has released several monetary support policies, but fiscal policies are slow to fully impact real demand.

  • Export conditions remain uncertain because of global economic and geopolitical factors.

  • In the short term, market prices are more driven by sentiment and raw material costs than by real demand.

3. What Global Buyers Should Watch

1. Nickel and Raw Material Prices

If nickel keeps rising due to Indonesian policy changes, stainless steel prices will stay under upward pressure.

2. Steel Mill Production

Any further production cuts will tighten supply and support higher export prices.

3. Inventory Levels in China

Continuous inventory decline means less spot material and stronger seller pricing.

4. Best Buying Strategy

  • If you have confirmed projects, consider booking earlier to lock prices.

  • If your demand is flexible, watch nickel trends closely before placing large orders.

  • Short-term market is likely to stay volatile rather than move in a straight line.

5. Summary for Importers

This week, China’s stainless steel prices rose strongly due to:

  • Rising nickel prices from Indonesian supply concerns

  • Tight supply from slower mill production

  • Falling market inventories

However, real demand is still weak because it is the traditional off-season, so buyers remain cautious.

Outlook:
In the short term, stainless steel prices are supported by cost and supply factors, but may fluctuate as market sentiment changes. Global buyers should closely watch nickel prices, Chinese mill production plans, and inventory trends to decide the best timing for procurement.

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