The stainless steel contract prices strengthened slightly last week. The SS2112 contract reached a high of around 19,200 yuan/mt, which is higher than the spot prices. The price difference between the SS2112 and SS2201 contracts remained above 1,000 yuan/mt. However, the strength of stainless steel contracts is mainly due to the overall sentiment of the market and restrictions on the delivery of stainless steel warrants.
The current demand for stainless steel has not improved, and the consumption is expected to be weak, which is still insufficient to support the gains in the stainless steel prices. At present, the contradiction between the supply and demand is slightly heightened. The consumption is expected to slide in the traditional off-season. This, combined with the Chinese New Year holidays, will reduce the demand.
The supply will increase after steel mills resume production, increasing the pressure on the stainless steel market. In addition, the prices of raw materials have fallen, and the lower costs have weakened the support for stainless steel prices. Therefore, it is expected that the stainless steel market will still be weak, but the price decline will be limited.