Stainless Steel Intelligence Report

Diagnosis: Stainless steel remains in a nickel-cost-driven plateau, with LME Ni recovering ~2% to $16,405/mt from Jul 7 lows as Indonesia's ESDM declared it would not increase RKAB quotas overall — reaffirming the structural supply tightening. The floor is firmed by NPI production cuts (Eramet Weda Bay halted, Tsingshan power diversion, 50+ license suspensions) but the ceiling is held by a still-elevated combined LME+SHFE nickel stock overhang of ~375K mt (Bernstein). The EU Steel Overcapacity Regulation (2026/1384) took full effect Jul 1, cutting quotas 47% and doubling above-quota tariffs to 50%. Bernstein raised its 2026 nickel price forecast to $17,357/mt on Jul 9, citing a market "more balanced than anticipated." Three forces define mid-July 2026: Indonesia's NPI supply squeeze and the RKAB mid-year revision (deadline Jul 31), the stock overhang capping rallies, and the now-effective EU safeguard restructuring global supply chains. Procurement posture is DEFENSIVE: secure H2 European volume under the new safeguard regime, evaluate 304L substitution where 316L premium exceeds 30%, and monitor the RKAB mid-year revision window as the single most powerful swing factor.