HRC futures fluctuated downward today, with the most-traded contract closing at 3,275, down 0.37% MoM. Spot market side, market quotations remained largely stable with slight price cuts in some markets. Market transactions were relatively lackluster, dominated by rigid-demand purchases. In terms of supply, few new maintenance shutdowns were added this week, and coupled with the gradual production resumptions from earlier maintenance, supply showed an incremental trend. Demand side, futures and spot price trends diverged, and spot market purchasing enthusiasm was weak, mainly driven by rigid demand. Inventory side, Zhangjiagang port inventories accumulated 30,000 mt compared to pre-holiday levels, and affected by the holiday, destocking performance in some markets may fall short of ....

This week, stainless steel spot prices fell slightly more than production costs, further worsening the inversion between stainless steel mill prices and costs. Taking 304 cold-rolled products as an example, based on raw material prices on the day, the full cost profit margin was -1.19% this week; calculated based on raw material inventory costs, the margin was -0.55%. Nickel-series raw material costs, high-grade NPI prices remained in the doldrums this week. Although nickel ore prices are currently holding firm and NPI traders are broadly bullish, SHFE nickel futures have been weak recently, while downstream stainless steel prices have struggled to rise. Stainless steel mills themselves are under heavy cost pressure and have shown low acceptance of high-priced raw materials, resulting in sparse market transactions recently; affected by this, high-grade NPI traders have faced considerable transaction pressure, and the price center edged lower slightly. As of this Friday, high-grade NPI with a grade of 10-12% fell by 2 yuan per nickel unit to 1,081.5 yuan/nickel unit. Stainless steel scrap market, stainless steel scrap prices were stable this week, and the decline in finished stainless steel prices did not transmit to the steel scrap market, while prices of substitute furnace charge also remained stable. Tightness in tax invoices eased, the economic advantage of steel scrap became more evident, and high stainless steel mill production schedules drove higher consumption, lifting market transactions and easing inventory pressure. However, finished product prices struggled to rise, limiting upside room for steel scrap prices, which are expected to remain stable in the short term. As of this Friday, the price of 304 off-cuts in Shanghai rose by 100 yuan/mt, with the latest quote at around 10,150 yuan/mt. Chrome-series raw material costs, high-carbon ferrochrome prices dropped back slightly this week. Although some ferrochrome producers recently reported maintenance and production cuts, and stainless steel production schedules for April remained high, leaving retail spot supply in the ferrochrome market relatively tight, stainless steel mills had built relatively ample ferrochrome raw material inventories earlier. Meanwhile, high port inventories of chrome ore recently caused some loosening in chrome ore spot prices. In addition, ferrochrome capacity has already reached a high level, the rainy season in south China is approaching, and ferrochrome producers outside China are resuming production. With ferrochrome producers lacking confidence in the outlook, ferrochrome prices still faced some downward pressure. As of this Friday, high-carbon ferrochrome prices in Inner Mongolia fell 25 yuan/mt (50% metal content) WoW to 8,625 yuan/mt (50% metal content).

In the spot market, high-priced long-term contracted cargoes arrived at ports in the early stage with high cargo receiving costs. Domestic traders showed a strong willingness to prop up prices, driving continuous hikes in chromite quotations. However, downstream demand remained sluggish. Coupled with persistently high shipments and a notable inventory build-up, selling pressure intensified, slowing the upward momentum of spot chromite prices.

Dalian iron ore futures rose in early trading today before slowly pulling back. The most-traded contract I2605 finally closed at 812 yuan/mt, down 0.49% from the previous trading session. Spot prices fell by about 2-5 yuan from the previous trading day. Traders were mediocre in offering quotations, while steel mills restocked as needed; overall transactions in the spot market were limited. Fundamentals, according to the SMM survey, port inventories began to decline slightly this week, with total inventory across 35 ports nationwide down 610,000 mt WoW to 155.78 million mt, a decrease of 0.39%. Meanwhile, port pick-up volume increased by 110,000 mt WoW to 2.855 million mt. Although support below ore prices gradually strengthened along with the pace of hot metal production resumptions, supply side still faced the risk of further increases as weather-related disruptions eased and iron ore returning from the Middle East arrived in China. Overall, upward pressure on ore prices had not yet eased significantly, and with downside support gradually strengthening, prices were expected to fluctuate at highs in the short term.

According to SMM's statistics on February 27, the total bauxite inventory at ten domestic ports increased by 2.12 million mt from the previous week.

The chrome ore market performed strongly in the first week after the Spring Festival. Although the March stainless steel tender prices announced by Tsingshan and TISCO on the alloy side were flat, falling slightly below previous bullish expectations, the ore sector was driven by both costs and supply, with futures and spot prices rising simultaneously. Traders hold an optimistic outlook on the future market, showing a clear attitude of supporting prices.