Stainless Steel Intelligence Report

Market diagnosis: Stainless steel 304 CR coil is holding near $2,015/mt FOB China, with the risk skew shifting tighter as LME nickel inventories post their first sustained drawdown of 2026 (six sessions, down ~8,000 t to 266,172 t by July 31) and Indonesia's ore supply chain shows real constraints. Weda Bay Nickel halted ore output after its 2026 RKAB allowance was cut 70% to 12M wet tons; Tsingshan is diverting power from NPI plants to aluminum; the Philippine monsoon is slowing ore shipments. The offsetting bearish factor is active: Indonesia is reviewing supplementary RKAB quota relaxations that would improve H2 smelter feedstock. The EU safeguard restructuring (effective July 1) has cut stainless CRC quotas 53%, tightening European supply. Global stainless output is still expanding (Q1 2026 +2.5% YoY). Procurement posture: defensive — hold coverage, avoid locking volume above $2,050/mt, and treat Indonesia's supplementary quota decision as the direction-setting catalyst.