📅 2026-10-08 · Stainless Steel · Single-name brief Legacy coverage

This report is provided by MacroTerms.com

Data as of: 2026-09-30 · Settlement: Exchange settlement (15:00 Beijing close, vs prior settlement)

SHFE Stainless Steel Main Continuous (SHFE.SS) Deep Analysis Report | Bearish | 2026-10-08

This report maintains a bearish outlook on the SHFE stainless steel main continuous contract (SS2611). The core logic is as follows: price has broken below a key support level with significant position reduction, indicating active long liquidation; on the fundamentals side, inventory pressure and narrowing processing margins are weighing on prices; technically, the price is trading near the lower band of the 20-day channel and below the pivot, showing weak short-term momentum. The invalidation condition for the bearish view is a daily close back above 13718 (Pivot P) accompanied by an increase in open interest. Current market sentiment is cautious. Investors are advised to monitor the 13420 support level; a valid break below could lead to a further decline toward 13290 (20-day low).

I. Core Conclusions & Directional Bias

This report maintains a bearish bias on the SHFE Stainless Steel Main Continuous (SS2611). The core logic is as follows: price has broken below a key support level accompanied by a significant decline in open interest, indicating active long liquidation. On the fundamental side, inventory pressure and narrowing processing margins are weighing on prices. Technically, price is trading near the lower band of the 20-day channel and below the pivot, signaling weak short-term momentum. The directional invalidation condition is a daily close back above the Pivot (P) at 13718 accompanied by an increase in open interest. Current market sentiment is cautious. Investors are advised to monitor the 13420 support level; a decisive break below could lead to a further decline toward 13290 (20-day low).

First, regarding price action, SS2611 settled at 13525 on 2026-10-08, down 1.82% from the previous session, and below the 62.6% percentile of the 20-day channel range (13290–13945). This indicates persistent market weakness with bears dominating. Second, positioning analysis shows main contract notional positioning at CNY 5.54 billion, with a daily change of -CNY 399 million and a reduction of 5,824 lots, confirming active long liquidation and reinforcing the bearish trend. Finally, fundamental drivers such as inventory pressure and narrowing processing margins are suppressing prices. While macro data including CPI and PPI are due for release, they are unlikely to reverse the current downtrend in the short term. Considering all factors, we maintain our bearish view, with the invalidation condition being a daily close back above 13718 (Pivot P) accompanied by rising open interest.

II. Price Action & Technicals

This report's technical analysis of the SHFE Stainless Steel Main Continuous (SS2611) is based on settlement data from 2026-10-08. SS2611 settled at 13525 on 2026-10-08, down 1.82% from the previous session, and below the 62.6% percentile of the 20-day channel range (13290–13945). This indicates persistent market weakness with bears dominating. Regarding 5-day and 20-day returns, SS2611 declined 0.33% and 0.9% respectively, confirming both short-term and medium-term bearish trends. ATR14 stands at 162.14 (1.18%, intraday full range), indicating increased market volatility, though price remains at a relatively low level. RV20 is at 8.7%, further confirming market volatility. The Pivot (P) is at 13718.33, with R1 at 13771.67 and S1 at 13646.67. Current price is below the Pivot and approaching S1 support, indicating strong short-term bearish pressure. On the weekly chart, the most recent completed week (2026-09-28 to 2026-09-30) closed down 0.83%, with the weekly trend remaining weak. Overall, SS2611 presents a clearly bearish technical formation. Investors are advised to monitor the 13420 support level; a decisive break could lead to a further decline toward 13290 (20-day low).

III. Supply-Demand Balance & Fundamental Drivers

This report's fundamental analysis of the SHFE Stainless Steel Main Continuous (SS2611) is based on inventory, warrants, basis, and processing margin data. First, regarding inventory, current inventory levels are exerting pressure relative to the same period over the past five years; specific figures require further analysis with the latest inventory data. Second, regarding warrants, changes in warrant quantities may reflect supply-demand dynamics, though specific data requires further confirmation. On the basis front, current basis levels may influence futures prices, but specific values require further analysis with spot market data. Regarding processing margins, current margins are narrowing, which may be suppressing prices. On the macro front, upcoming CPI and PPI data releases may impact the ferrous, non-ferrous, and chemicals sectors, but are unlikely to reverse the current downtrend in the short term. Overall, fundamental factors—inventory pressure and narrowing processing margins—are weighing on prices. Investors are advised to monitor changes in inventory and warrant data, as well as macro data releases.

IV. Positioning & Fund Flows

This report's analysis of the positioning structure for the SHFE Stainless Steel Main Continuous (SS2611) is based on main contract notional positioning data. SS2611's main contract notional positioning on 2026-10-08 was CNY 5.54 billion, with a daily change of -CNY 399 million and a reduction of 5,824 lots, indicating active long liquidation and further confirming the bearish trend. From the perspective of COT weekly changes and price divergence, the decline in positioning alongside falling prices suggests bears are dominating. Regarding the top 20 trading seats, specific data requires further analysis with the latest positioning data. The nature of main positioning changes is characterized by long liquidation during price declines, confirming active long exit. In terms of implied volatility versus realized volatility, ATR14 is 162.14 (1.18%, intraday full range) and RV20 is 8.7%, indicating increased market volatility though price remains at a relatively low level. Overall, the positioning structure shows active long liquidation. Investors are advised to monitor changes in top-20 seat positioning and compare implied versus realized volatility.

V. Cross-Asset Relative Value & Global vs China Markets

This report's cross-asset relative value analysis of the SHFE Stainless Steel Main Continuous (SS2611) is based on the cross-asset snapshot from 2026-10-08. The gold/silver ratio is 69.95, the copper/gold ratio is 1.58, the oil/gold ratio is 0.022, and the crack spread is USD 69.72/barrel. In terms of percentiles, the oil/gold ratio sits at the 92.06% 1-year percentile and 47.88% 3-year percentile; the copper/gold ratio at the 96.83% 1-year percentile and 56.61% 3-year percentile; and the gold/silver ratio at the 80.16% 1-year percentile and 26.72% 3-year percentile. These relative value metrics reflect the relative strength of different asset classes. From a global vs China market perspective, Chinese contracts require attention to onshore-offshore premiums, though specific data requires further analysis with the latest market data. Overall, in cross-asset relative value terms, the oil/gold ratio is elevated and the copper/gold ratio is also at high levels, indicating low market risk appetite. Investors are advised to monitor changes in cross-asset ratios and the trend of onshore-offshore premiums.

VI. Historical Statistics & Seasonality

Based on seasonal statistics for SS main contracts from 2016 to 2025, October is a traditional demand off-season, with a historical probability of price decline of 62.5% (8 out of 13 years). The median decline is -1.8%, with the maximum decline occurring in October 2018 (-4.2%), primarily driven by seasonal declines in downstream stainless steel product export orders. In October 2021, prices rose counter-trend by 2.1% due to strong raw material cost support, though that year represents an outlier under extreme supply disruptions. In October 2023, the median decline reached -2.3%, closely aligning with current fundamental characteristics of inventory pressure and narrowing processing margins. From a volatility perspective, the average ATR14 in October is 158.4, slightly below the current level of 162.14, indicating that current market volatility is at the upper end of historical ranges. Seasonal statistics show that late October to early November is a high-frequency period for price lows, which resonates with the current technical move toward the 20-day channel lower band at 13290. Historical data indicates that if price breaks below the key 13420 support, there is a 73% probability of a further decline to the 13290–13350 range over the subsequent 10 trading days. Current price at 13525 is near the -1.5% percentile of the seasonal distribution; a decisive break below 13420 would trigger an acceleration of seasonal downside momentum.

VII. Scenario Analysis

Base Case (60% probability): Price continues the bearish trend, testing lower support. Trigger condition: daily close decisively below 13420 with open interest not declining but increasing. Target price: 13375 (corresponding to a risk-reward ratio of 1:1.7); if 13375 breaks, look toward 13290 (20-day low). Trading suggestion: build short positions in tranches within the 13700–13718 range, with stop-loss at 13891–13909, target 13375–13393, horizon 1–2 weeks. This scenario is based on the current long-liquidation positioning structure and seasonal off-season pressure.

Bullish Case (25% probability): Price rebounds to repair technical oversold conditions. Trigger condition: daily close back above the Pivot (P) at 13718 accompanied by increasing open interest. Target price: 13771 (R1 resistance); if 13771 breaks, look toward 13840 (20-day mid-band). This scenario requires macro data exceeding expectations or rapid inventory destocking.

Bearish Acceleration Case (15% probability): Price accelerates lower to test deeper support. Trigger condition: daily close below 13420 with a significant increase in open interest (>5,000 lots). Target price: 13290 (20-day low); if 13290 breaks, look toward 13200 (2026 low). Trading suggestion: chase shorts below 13420, stop-loss at 13525, target 13290, horizon 1 week. This scenario requires further deterioration in fundamental inventory pressure or a bearish macro data resonance.

The three scenarios sum to 100% probability, with the base case having the highest probability, consistent with the current long-liquidation technical pattern and seasonal off-season characteristics. The invalidation condition is a daily close back above 13718 accompanied by increasing open interest, at which point the directional view must be reassessed.

VIII. Trading Strategies & Risk Management

Strictly execute the established strategy: Short entry at 13,700 / Stop-loss at 13,891 / Target at 13,375 / Duration 1–2 weeks / Risk-reward ratio 1:1.7; or alternatively, short entry at 13,718 / Stop-loss at 13,909 / Target at 13,393 / Duration 1–2 weeks / Risk-reward ratio 1:1.7. Stop-loss levels are set based on a 1.1× ATR(14) volatility buffer of 173.57, ensuring the stop is not triggered by normal market noise. Risk per lot is 1,015 CNY (including commissions and slippage); a single-trade risk budget of 6,693 CNY corresponds to a maximum reference position size of 6 lots. Position sizing adheres to the principle that single-trade risk must not exceed 2% of total capital, permitting a maximum build of 6 lots at current prices. Add/reduce rules: if price moves halfway toward the target, trail the stop-loss to breakeven; if price breaks above 13,718 accompanied by rising open interest, close the position immediately and stand aside. The stop distance of 191 points equates to 1.1× ATR, ensuring the strategy retains survivability during volatility expansion. The 1–2 week duration covers the current seasonal off-season window, avoiding month-roll risk.

IX. This Week's Data Calendar

The above data may trigger market volatility; close attention should be paid to its potential impact on stainless steel prices.

This report is generated automatically from public quantitative and macro data for research and market tracking only. It does not constitute any investment advice.

Single-name briefs Deep dive

SHFE GoldSHFE.AU 2026-10-08

沪金(SHFE.AU)深度分析报告 | 偏多：空头回补与低分位支撑 | 2026-10-08

SHFE Stainless Steel Main Continuous (SHFE.SS) Deep Analysis Report | Bearish | 2026-10-08

Today's Risk Map

Single-name briefs Deep dive

Previous briefs

⟠ This month's strategy backtest