Stainless Steel Market Under Pressure as Supply-Demand Structure Diverges

According to industry analysts, on June 10, 2026, the global nickel market weakened again. The SHFE nickel main contract fell by 1.83%, while London Metal Exchange (LME) nickel prices also dropped by 2.20% on June 9. The synchronized decline in nickel prices reflects a phased downturn in the global stainless steel and new energy raw material markets.

Meanwhile, Mysteel data shows that Indonesia’s nickel pig iron (NPI) output remains at a high level but with slowing marginal growth.

Indonesian Nickel Pig Iron Output Remains High but Declines MoM

According to Mysteel’s survey of 15 projects in Indonesia:

• May 2026 NPI output: 36,000 tons
  • MoM: -9.89%
  • YoY: +117.38%
  • High-grade NPI: 29,800 tons
  • Low-grade NPI: 6,200 tons
• Jan–May 2026 cumulative output: 193,400 tons
  • YoY: +68.53%
• June 2026 forecast: 35,600 tons
  • MoM: -0.98%
  • YoY: +44.03%

Overall, Indonesia remains a key global supplier of nickel intermediates, maintaining strong expansion momentum, but growth is clearly slowing, easing marginal supply pressure.

Stainless Steel Prices Decline as Market Sentiment Weakens

Driven by weaker raw material prices and soft demand, the stainless steel market also came under pressure:

• Stainless steel main contract fell by 0.85%
• Closed at 14,385 yuan/ton

The market shows a dual pressure of weaker cost support and weak demand, limiting short-term price recovery.

Structural Divergence Intensifies: 200-Series Cuts vs 300-Series Growth

Since May, under macro policy guidance, profit divergence, and weak demand:

• 200-series stainless steel: production cuts
• 300-series stainless steel: output hits yearly high

The industry shows clear structural imbalance:

• Low-end capacity contraction
• High-end capacity expansion
• Intensified intra-industry competition

Policy Tightening: Ongoing Supply-Side Reform

China’s steel industry continues moving toward high-quality development:

• Higher entry barriers for new capacity
• Strict control on new expansions
• Encouragement of mergers and restructuring
• Promotion of green and low-carbon transformation
• Gradual exit of inefficient and high-pollution capacity

Policy direction is clear: shifting from scale expansion to quality optimization.

Outlook: Short-Term Loose Supply vs Long-Term Tightening

The stainless steel industry is showing a structural contradiction:

Short term:

• Capacity replacement cycle continues
• Slower new project commissioning
• Relatively sufficient supply

Long term:

• Continued tightening of capacity entry
• Exit of inefficient producers
• Increasing industry concentration

This creates a dual structure of short-term oversupply and long-term tightening.

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Driven by falling nickel prices, high but slowing Indonesian NPI output, and domestic structural adjustments, the stainless steel industry is entering a new phase of rebalancing. Future price trends will depend on:

• Nickel ore and intermediate supply changes
• Recovery of downstream demand
• Strength of policy-driven capacity control

Overall, the industry is transitioning from an expansion cycle to a structural optimization cycle.

Data source: https://www.mysteel.com/