The SS flats (Stainless Steel flats) market faced supply pressure and weak demand in October, with inventories easing slightly. Seasonal consumption and China’s energy projects offered support, while Europe struggled under CBAM uncertainty. Prices remain volatile, but protectionist policies and rising coil values may bring modest margin improvements despite stagnant demand.
In October, the domestic SS flats market saw supply-side pressure mount instead of easing. Prices for SS flats increased 2.7% month-on-month, reflecting stronger cost dynamics. The planned crude stainless steel output reached 3.4472 million tons in October 2025, up 0.6% from September, as mills sustained high operating enthusiasm during the traditional peak in "Golden September, Silver October". Producers have thus far refrained from cutting production, which is keeping SS flats supply at a high level. Meanwhile, SS flats inventories edged lower. As of the end of the month, total inventories of stainless steel reached 1.027 million tons - down 2.5% compared to the prior week.
On the demand side, SS flats consumption started to improve. In the home appliance sector, orders moderately rebounded, as there were seasonal drivers such as the National Day holiday and the “Double Eleven” shopping festival, sustaining positive growth in both domestic and export sales. Such an uptick provides incremental demand for SS flats used in appliance manufacturing.
Beyond consumer goods, structural demand for SS flats was bolstered by China's major chemical and energy initiatives in September and October 2025. In this respect, Sinopec's capacity rise at its Xinjiang refinery from 5 to 8.5 million tons annually, following the addition of 16 new processing units by 2029, tends to reflect stronger downstream requirements. Furthermore, a speedup of projects for coal-to-gas and coal-to-chemicals, aimed at reducing LNG imports, further underpins stainless steel flat product demand in energy infrastructure. Meanwhile, the government's petrochemical restructuring plan to phase out about 40% of outdated plants and channel investment into advanced high-value material supply agrees with a shift toward higher quality uses of SS flats. Innovation, quality growth, and cooperation were also accentuated at the Ningbo CPCIC, reflecting China's place at the end of the 14th Five Year Plan.
Looking ahead, sentiment around SS flats is shaped by expectations of rate cuts both at domestic and overseas. While cost inputs remain favorable for miners, softening ferronickel prices are undermining stainless steel production economics. Seasonal demand has only slightly boosted downstream consumption of SS flats, while meagre arrivals at steel mills have somewhat eased inventory pressure. In the near term, SS flats prices are likely to remain volatile but biased toward weakness.
In Germany, SS flats prices dropped 3.5% month over month. The broader European stainless steel market remained subdued during early October, weighed down by uncertainty not only regarding trade measures but also the CBAM rollout. Demand for SS flats in the downstream sector was still weak, which reflected the same sluggish consumption patterns seen in the carbon flat steel segment, as confirmed by stainless steel mills and processors.
Large buyers of SS flats continue to rely on imports, emphasizing that the current market uncertainties leave them with few other options. Many participants clarified that CBAM costs cannot yet be calculated with accuracy, making it necessary for them to make near-blind purchases and accept the risk that their forecasts will prove wrong, especially with CBAM payments due to begin in 2027. The market participants pointed out that although some mills appeared keen to hike SS flats prices, such moves have not resulted in tangible deals so far, and transactions concluded were still at prevailing market levels.
Overall, across Europe, stock levels of SS flats remain high. Poorer-than-expected automotive sector performance has again pushed back purchasing activity. Plans to invest in heavy industry projects are also being postponed amid continued uncertainty, which is further depressing demand for SS flats.
Looking ahead, the first-quarter SS flat-steel outlook is likely to improve with higher coil prices and increased purchasing of European material. Mills producing SS flats will benefit from new protectionist measures by the European Commission, which will give some support to margins. Still, while there may be some modest profitability gains in the near term, overall consumption of SS flats is expected to remain largely in line with recent levels.
