Stainless Steel Intelligence Report

Diagnosis: Stainless steel is in a nickel-cost-driven plateau, with LME Ni down 14% from May highs to $16,065/mt, pulling 304 coil estimates to $1,150-$1,170/mt FOB China. The floor is firmed by Indonesia NPI supply cuts (Eramet Weda Bay halted, Tsingshan power diversion) but the ceiling is held hard by a ~468K mt combined LME+SHFE nickel stock overhang — a historic peak. The EU steel safeguard overhaul (effective Jul 1) is now pricing in: quotas cut 45%, above-quota tariff to 50%. Three forces define H2 2026: Indonesia's supply squeeze, the massive stock overhang, and demand bifurcated between weak construction and growing energy transition. Procurement posture is DEFENSIVE: secure H2 European volume post-safeguard, evaluate 304L substitution where 316L premium is unjustified, and watch the late-July Indonesia RKAB decision as the single most powerful swing factor.