In yesterday's [SMM Analysis] EU Steel Tariff Wall Doubles to 50%: Reconstructing the New Quota System & In-Depth Analysis of 1A HRC, SMM deeply analyzed the brutal allocation logic of the EU's new 18.35 million tonnes quota. When the "50% tariff wall" and the "melting and pouring" rules completely block traditional tax-free export paths, the global steel supply chain is undergoing a forced reshuffle. Today, we shift our perspective to the ripple effects and macro-level forecasts of this storm.

[SMM Magnesium Weekly Review: Entire Magnesium Industry Chain Weakens; Supply-Demand Weakness Keeps Market Under Pressure] This week, China's magnesium industry chain was in the doldrums across the board. Dolomite prices in Wutai, Shanxi, remained flat. Regional supply tightened, but national supply was ample, and only just-in-time procurement was insufficient to drive prices higher. Fugu and Shenmu 9990 magnesium ingot mainstream prices were 15,750-15,850 yuan/mt, down 200 yuan on the week. High in-factory inventory prompted producers to sell at lower margins, while downstream buyers stayed on the sidelines, making only small restocking purchases, resulting in slow destocking. The average FOB price of magnesium ingot at Tianjin port was $2,275/mt. Overseas demand was sluggish due to the summer break, foreign buyers pushed for lower prices, and new orders were scarce. Falling raw material prices dragged down magnesium powder and magnesium alloy prices. Small and medium-sized magnesium alloy plants cut production, but earlier stockpiles were ample. Two-wheeler demand weakened, putting processing fees under pressure. Both upstream and downstream demand softened simultaneously, and cost support was insufficient. In the short term, the entire magnesium product range is expected to remain in the doldrums.

[Covering Seven Major Production Regions! SMM Launches Daily Provincial Profit Indicator for Zinc Smelting Using 40% Imported Ore] In May 2026, SMM added daily profit models for domestic ore in the eight major zinc smelting regions of Inner Mongolia, Henan, Gansu, Hunan, Guangxi, Yunnan, Shaanxi, and Sichuan for market reference. ...

[Sheets & Plates] Due to RMB exchange rate fluctuations, HRC prices and other sheet and plate export prices were down day-on-day today, with HRC transaction prices at $490-500/mt. Market inquiries showed no significant changes today, while inquiries for Turkey-bound shipments remained. It is understood that desired CIF prices there were low, far below current domestic FOB quotes.

This week, LME copper prices retreated from highs, drifting lower after hitting a high at Monday’s open. Mid-week, prices briefly fell to a low of $12,988/mt, with a weekly decline of about 3.3%. The pullback in copper prices led to a slight spike in payable indicators, pushing up the overall discount range by about 0.2%. By specific grade, bare bright copper saw its main transaction coefficient remain high at 98.5%–99%, while No.1 copper semis’ transaction range was concentrated at 97%–98%. In contrast, quotes for No.2 copper semis showed clear divergence: with precious metal prices staying high, smelters’ acceptance of No.2 copper semis with high gold and silver content rose significantly, with quotes reaching 97.5%–98%, even exceeding those for No.1 copper semis in a price inversion. Such high-gold-and-silver-content copper semis mainly originate from the Americas, so quotes for Americas-origin No.2 copper semis were notably higher than from other regions. Meanwhile, No.2 copper semis from Japan, South Korea, and Southeast Asia, generally low in gold and silver content, saw relatively pressured quotes, with transaction ranges mostly concentrated at 95%–96%. However, constrained by the current overall supply-demand weakness, actual market transactions this week were relatively sluggish. On one hand, payable indicators were already at historical highs, limiting room for further upside. On the other, although copper prices pulled back and enterprises’ tolerance for high prices gradually improved, the absolutely elevated copper prices still significantly suppressed purchasing sentiment. In addition, macro and seasonal factors further dragged on major Asian consumer markets: Japan, one of the key consumers, was about to face its annual settlement window on June 30, and some enterprises had already stopped purchasing in advance. At the same time, Japanese scrapyards were engaged in Q3 quarterly supply negotiations with downstream consumers, causing them to generally slow down their current purchasing pace. Compounding this, the yen and won exchange rates against the US dollar remained at low levels, driving up local enterprises’ ex-China procurement costs and prompting traders in both regions to adopt a generally cautious stance toward overseas purchases. Under the combined weight of falling copper prices and tight overall market supply, ex-China scrapyards currently hold a strong sentiment of holding back from selling, and the near-term market stalemate is expected to continue into next week.

[Steel Billet] Today, export billet quotations were in the doldrums, with negotiable prices at $465-467/mt. Recently, the yuan has depreciated against the dollar, leading to a slight improvement in export advantage. Inquiries from outside China increased, but actual transactions remained moderate. Market rumors suggest steel billet orders have improved, with some cargoes flowing to domestic trade or exporter short-covering, while actual overseas demand still awaits the return of China's export price advantage. [Rebar] Affected by the exchange rate depreciation, export quotations for rebar edged down $2/mt today, with negotiable prices at $484-486/mt. According to feedback from market traders, inquiries from outside China increased slightly recently, but actual transactions remained moderate. At present, quotations from steel mills in South China continue to hold at high levels, with weak transactions. [Sheets & Plates] Affected by the afternoon plunge in Chinese futures, export prices for HRC and other sheets & plates edged down slightly on a day-on-day basis today, with HRC transaction prices at $491-500/mt. In recent days, market rumors have suggested that export orders are improving. According to SMM's verification, flows to the Middle East, although shipping has become somewhat smoother, still face high freight rates, and most clients expressed the need to wait and see; however, orders for sheets & plates and billets destined for Turkey have increased noticeably recently. It is understood that this may be due to fewer arrivals of other resources, leading to procurement shifting to China.