Raw Material Easing vs Spot Market Stalemate: A New Game in Late-July Stainless Profile Market

As we move into late July, an intriguing "temperature gap" has emerged in the stainless steel profile market: on one side, the raw material side is showing signs of loosening — waste stainless steel futures fell 70 CNY/ton in the night session, and the LME nickel oscillation range has shifted down from the previous 16,800-18,200 USD/ton band to 16,500-17,200 USD/ton; on the other side, the spot market remains in stalemate — 51bxg data for July 24 shows Tsingshan 304 bar at 14,150 CNY/ton in Wenzhou and 14,200 CNY/ton in Wuxi, holding flat for several consecutive days. This divergence between "weakening raw materials" and "stable spot prices" constitutes the most noteworthy point in the late-July profile market.

Looking at the raw material side, this round of "easing" is being driven by two threads. First, on the waste stainless steel side, although circulating resources in Zhangjiagang and Wuxi remain tight, downstream purchasing willingness has weakened simultaneously, causing traders' shipment mentality to loosen somewhat, with the futures market being the first to reflect this expectation. Second, on the nickel side, Indonesian nickel pig iron new capacity continues to be released, LME refined nickel inventories remain at medium-to-high levels, and combined with a strong US dollar suppressing overall metals prices, the downward shift in the nickel oscillation range is already a fact.

By conventional logic, raw material loosening should transmit downstream to spot quotes. However, the late-July profile spot market has shown a clearly muted response. There are three core reasons: first, mills' earlier price-support strategies have accumulated a certain "psychological price level", with no strong willingness to actively cut quotes; second, orders at the tail of the off-season are still mainly small-volume, just-in-time purchases, lacking triggering factors that would cause batch price adjustments; third, the quote base for mainstream specifications such as 304 bar Φ65 and 316L bar (14,150 and 28,500 CNY/ton respectively) is relatively high, so even if the raw material side drops by 100-200 CNY, the marginal impact on terminal quotes is limited.

From a game-theory perspective, three parties are currently in confrontation. Upstream mills insist on supporting prices and are reluctant to give way; midstream traders have conflicting mindsets — they neither dare to stockpile heavily during the off-season, nor are willing to sell cheaply before the peak season; downstream users generally adopt a "buy on demand, stock up cautiously" strategy, waiting for prices to become clearer. With none of the three parties having a strong incentive to break the current balance, spot quotes have entered a "easy to defend, hard to attack" stalemate.

The market direction in the next 1-2 weeks will largely depend on the order release pace in early August. If orders can show concentrated surges in early August, spot quotes may leverage peak-season expectations to achieve "volume-supported price stability", and the raw material easing signal will be absorbed by the market. Conversely, if order release falls short of expectations, combined with the transmission pressure of continued raw material weakness, it cannot be ruled out that some non-mainstream specifications will lead with 100-200 CNY/ton tentative cuts. However, mainstream specifications, supported by medium- and long-term factors such as mill production cut expectations and overseas anti-dumping extensions, still have a relatively low probability of significant decline.

For downstream users of stainless steel profiles, the current stage is a relatively friendly procurement window — spot prices are stable and the raw material side is not experiencing sharp fluctuations. It is recommended to stock up reasonably based on your own order cycles; for specifications with sustained high quotes (such as 316L Φ65), consider locking in prices in advance; for regular specifications, simply maintain a normal procurement pace without needing to over-adjust procurement strategies in response to short-term raw material fluctuations.