Domestic ore:
Last Friday, the domestic ore market in Liaodong remained stable overall. In recent days, ore futures rose, coupled with cost support, mines and beneficiation plants showed obvious high-price expectations and were unwilling to sell below their psychological expectations. However, the procurement prices of local leading steel mills were low, and their affiliated trading suppliers mostly stopped supplying due to purchasing difficulties, leaving little profit margin for suppliers. Market inquiries remained relatively scarce, and overall transaction activity was sluggish, with clear game-playing mentality between sellers and buyers. In the short term, local iron ore concentrate prices are expected to fluctuate.
Imported ore:
Last Friday, DCE iron ore futures continued to hold up well, with the most-traded contract I2509 closing at 764, up 1.8% for the day, though the gains narrowed significantly. Traders followed market trends. Approaching the weekend, and with prices at highs, steel mills cautiously waited and watched, leading to reduced inquiries. Market transaction sentiment was moderate. In Shandong, mainstream transaction prices for PB fines were around 748-750 yuan/mt, up 2-3 yuan/mt from the previous day; in Tangshan, PB fines traded at 763-765 yuan/mt, up 2-3 yuan/mt from the previous day.
As of July 11, SMM data showed that total iron ore inventory at 35 ports nationwide stood at 136.16 million mt, down 970,000 mt WoW. Daily average port pick-up volume for imported ore was 2.992 million mt, down 23,000 mt WoW. Port destocking continued, and resilient iron ore demand provided support for ore prices. Considering the rapid rise in ore prices this week, the market showed some fear of highs; however, strong fundamental support made a downward trend unlikely. Next week, ore prices are expected to fluctuate at highs.
Coking coal:
Low-sulphur coking coal in Linfen was quoted at 1,180 yuan/mt. In Tangshan, low-sulphur coking coal was quoted at 1,200 yuan/mt.
On the raw material fundamentals, some rectified coal mines have resumed production, and supply is expected to increase. Market transactions were active, with coke plants showing improved purchasing enthusiasm. Coal mines reported smooth shipments, and market sentiment was positive, with auction transaction prices generally rising. In the short term, coking coal prices are expected to increase slightly.
Coke:
The nationwide average price for first-grade metallurgical coke (dry-quenched) was 1,440 yuan/mt. The nationwide average price for quasi-first-grade metallurgical coke (dry-quenched) was 1,300 yuan/mt. The nationwide average price for first-grade metallurgical coke (wet-quenched) was 1,120 yuan/mt. The nationwide average price for quasi-first-grade metallurgical coke (wet-quenched) was 1,030 yuan/mt.
Supply side, some coke plants remained in losses and maintained production restrictions, but recent shipments were smooth, and coke inventory continued to decline. Demand side, finished steel demand showed resilience, steel mill profitability was moderate, and recent futures market performance was strong, boosting steel mills' enthusiasm for coke procurement. Overall, coke fundamentals are balanced, with some coke plants reluctant to sell. Coupled with futures market gains, market sentiment improved, and leading coke plants have initiated price increases. In the short term, the coke market is expected to stabilize with a bullish bias, and another round of price hikes is anticipated next week.
Rebar:
Last week, rebar prices fluctuated upward, with the nationwide average price at 3,166 yuan/mt, up 47.5 yuan/mt MoM. On the supply side, according to SMM survey data, daily average rebar production at blast furnace steel mills in July fell 2.2% MoM, with declines concentrated in southwest and east China. Southwest mills faced high inventory pressure, while some east China mills prioritized orders and profitability for other products, leading to planned cuts in construction materials production in July. Other mills focused solely on construction materials remained profitable, maintaining short-term production enthusiasm. Although EAF steel mill profitability improved, most remained in losses, and summer electricity price hikes in some east China regions further constrained short-term operating rates, limiting significant output increases. Demand side, July-August saw high temperatures and frequent rain, slowing construction progress. Seasonal off-season demand meant overall transactions lacked bright spots. In summary, short-term price trends will be driven by strong sentiment, but weak off-season realities will cap spot price gains. Once sentiment fades, market logic will revert to industry fundamentals, and under weak supply and demand, spot prices may fluctuate downward.
HRC:
Last week, HRC prices first stabilized weakly before rallying strongly, with improved market trading sentiment and increased weekly trading volume. Supply side, HRC production cuts from maintenance decreased this week, leading to a slight output increase. Demand side, off-season impacts were relatively small, with resilient sheet demand driving counter-seasonal weekly apparent consumption growth. Inventory side, per SMM statistics, nationwide HRC social inventory declined slightly, with destocking in east, north, south, and northeast China, while central China saw minor buildup. Cost side, coke prices stabilized, while iron ore surged, strengthening HRC cost support. News-wise, Shanxi steel mills received crude steel production restriction notices, with a provincial reduction target of 6 million mt, boosting downstream purchasing enthusiasm. Looking ahead, HRC fundamentals eased, with market performance stronger than usual for the off-season. Coupled with potential coke price hikes and stable iron ore, cost support will strengthen. Next week, the most-traded HRC contract may trade in the 3,180-3,340 range, but caution is warranted as current capital-driven sentiment could trigger price corrections with minor fluctuations.
