Stainless Steel Market Brief - Geopolitics Softens, Cost Support Remains Firm

Date: April 2026

The stainless steel market continues to operate under a complex interplay of geopolitical uncertainty, policy-driven cost structures, and cautious downstream demand. While volatility remains, recent signals suggest a gradual shift from macro-driven pricing toward fundamentals.

1. Nickel Market: Divergence Between LME and SHFE

Overnight,

1. LME Nickel rose by USD 250 to USD 18,235/MT

2. SHFE Nickel slightly declined by RMB 40 to RMB 140,920/MT

This divergence reflects a market still balancing external geopolitical risks with domestic sentiment. Despite short-term fluctuations, the broader structure remains range-bound, with no clear breakout direction.

2. Geopolitical Landscape: Risk Premium Fading

Recent developments between Xi Jinping and Saudi leadership emphasized stability in the Gulf region, particularly the importance of maintaining open navigation through the Strait of Hormuz.

However, uncertainty persists:

1. The US-Iran temporary ceasefire is approaching expiration (April 22)

2. Negotiations remain unclear, with Iran expressing distrust toward US commitments

Despite these tensions, market sensitivity to geopolitical risks is weakening, suggesting that pricing is gradually transitioning away from headline-driven reactions.

3. Indonesia Policy Impact: Structural Cost Repricing

Indonesia continues to reshape the nickel cost curve:

1. Revised HPM pricing formula significantly increases benchmark valuation

2. PT Vale indicates quota approvals below expectations, tightening perceived supply

3. Nickel ore prices remain stable, but nickel pig iron (NPI) continues to rise

The key takeaway is not short-term supply shortage, but a systematic elevation of the cost floor. This reinforces a structural shift where low-cost supply becomes increasingly limited.

4. Stainless Steel: Strong Cost Support vs Weak Demand

Futures & Spot Dynamics

1. Spot prices remained largely stable, with slight upward adjustments post-session

Mill Behavior

1. Tsingshan Holding Group raised May prices for 300 series by USD 50/MT

2. Pricing strength remains evident across major mills

Market Reality

Despite cost push:

1. Downstream acceptance of higher prices remains limited

2. Transactions are still driven by essential demand only

3. Traders increasingly adopt a price-for-volume strategy

5. Supply-Demand Mismatch: Core Constraint

The current market structure is defined by:

Bullish Factors

1. Rising raw material costs (nickel ore, NPI)

2. Policy-driven cost floor increase (Indonesia)

3. Mills maintaining firm pricing stance

Bearish Factors

1. High production levels from mills

2. Weak downstream purchasing willingness

3. Lack of real demand recovery

This creates a structural contradiction:

Costs are rising, but demand is not following.

6. Market Outlook: Range-Bound with Cost Support

In the short term:

1. Nickel: Expected to remain volatile within range, driven by policy and macro signals

2. Stainless Steel:

Conclusion: The market is transitioning into a cost-supported equilibrium phase, where price stability depends less on geopolitical shocks and more on real demand recovery.

Strategic Insight (For Buyers & Traders)

1. However, waiting for significant price drops may also be unrealistic due to elevated cost floors

The optimal strategy lies in controlled procurement with timing discipline