This week, ferrous metals were in the doldrums. The main logic during the week remained weakening cost support. On Tuesday, Iran proposed charging transit fees for the Strait of Hormuz, while Trump made conciliatory remarks, saying that “even if the Strait of Hormuz remained largely closed, he would still be willing to end military action against Iran.” Market expectations for tighter crude oil supply weakened, and declines in the energy sector dragged down the coal sector, weakening the cost-side logic. During the week, inventories of the five major steel products continued to decline, but apparent demand remained at a low level for the same period in previous years, providing limited fundamental-driven momentum to futures. In the spot market, purchasing interest was average, mainly focused on restocking at low prices. Spot prices were relatively firm, and the spot-futures price spread widened somewhat......

Today, Dalian iron ore fluctuated in the doldrums, with the most-traded contract I2605 finally closing at 799.5 yuan/mt, down 0.50% from the previous trading session. Spot prices fell by about 2-5 yuan from the previous trading day. Traders were moderately active in offering quotes, while steel mills mainly restocked to meet rigid demand, and transactions in the spot market tended to be mediocre. This week, total inventory at 35 main ports fell by 300,000 mt WoW to 155.48 million mt; over the same period, daily average port pick-up volume is expected to increase by 3 million mt, up 150,000 mt WoW. As steel mills gradually resumed blast furnace production, hot metal production rose steadily, effectively supporting rigid demand for iron ore. From a macro perspective, growing expectations that the conflict in the Middle East will become prolonged meant that energy prices hovering at highs will provide some cost support for iron ore. However, continued compression in steel mill profits and weak willingness to transact restrained upside room for iron ore prices. On balance, iron ore prices are expected to remain in the doldrums in the short term.

[SMM Daily Brief Review of Coking Coal and Coke] In terms of supply, coking coal costs for coke producers declined somewhat, and with the first round of coke price increases now fully implemented, losses at coke producers narrowed significantly, boosting production enthusiasm. Coke supply increased steadily, while downstream demand remained moderate, shipments were smooth, and producers' own inventory continued to decline. Demand side, steel mill blast furnaces gradually resumed production, and daily average hot metal production continued to increase, driving up rigid demand for coke. However, steel mills have recently seen good coke arrivals, with most mills' coke inventory at mid-range levels and overall procurement sentiment remaining average. In summary, coke market fundamentals have shifted toward looser supply and demand, and coupled with weaker recent cost support for coke, the coke market may remain temporarily stable in the short term, with further price increases facing greater difficulty.

Dalian iron ore futures held up well in morning trading today before pulling back in the afternoon. The most-traded contract, I2605, finally closed at 812 yuan/mt, up 0.12% from the previous trading session. Spot prices rose by about 2 yuan from the previous trading day. Traders were moderately active in offering quotes, while steel mills mainly purchased to restock for immediate needs, with inquiries remaining cautious; as of now, transactions in the spot market were relatively sluggish. As for this week’s fundamental data, according to SMM monitoring data on daily average hot metal production, the blast furnace operating rate recently rose 1.05% WoW to 89.71%; daily average hot metal production reached 2.436 million mt, an increase of 25,700 mt WoW. The continued stable resumption of blast furnace production over the past three weeks effectively boosted rigid demand for iron ore raw material, providing solid bottom support for ore prices. Overall, iron ore fundamentals showed a pattern of strong downside support and upside pressure from inventory. In the short term, ore prices were expected to move sideways in a narrow range, until new information or changes emerged in the market, which could trigger corresponding fluctuations.

Dalian iron ore futures were in the doldrums today after rising at the open. The most-traded contract, I2605, finally closed at 808 yuan/mt, down 0.80% from the previous trading session. Spot prices fell by about 5 yuan from the previous trading day. Traders were moderately active in offering quotes, while steel mills mainly restocked to meet rigid demand, with inquiries remaining cautious; as of now, spot market transactions were relatively sluggish. On the fundamentals, SMM’s weekly maintenance statistics showed that blast furnace maintenance affected hot metal production by 1.4281 million mt this week, down 186,100 mt YoY. The impact of maintenance was expected to ease further next week, by about 40,000 mt. Therefore, rigid demand for iron ore remained relatively strong this week, providing solid downward support for ore prices. However, iron ore prices faced clear upward pressure. On the one hand, port inventory remained at a relatively high level (about 155 million mt); on the other hand, the relatively high price level suppressed spot market trading activity, leaving insufficient upward momentum for iron ore. In summary, iron ore prices were expected to fluctuate within a range in the short term, with the overall market remaining in a stagnant state.

[SMM Daily Brief Review of Coking Coal and Coke] In terms of supply, coking coal costs charged into coke ovens at coking enterprises remained high. Coupled with solid demand for coke from steel mills and increased procurement volumes, coke inventory at coking enterprises continued to decline. On the demand side, blast furnace production resumptions at steel mills continued to advance, and hot metal production kept rebounding, strengthening rigid demand for coke. In summary, the supply-demand structure of coke remained tight. In the short term, the coke market may continue to hold up well, and the first round of coke price increases is expected to be implemented soon.

[SMM Daily Brief Review of Coking Coal and Coke] Supply side, coke producers' shipments were smooth, and coke inventory continued to decline, but recently the cost of coal charged into furnaces at coke producers continued to rise, dampening the production enthusiasm of some coke producers. Demand side, current hot metal production at steel mills continued to increase, boosting rigid demand for coke. In summary, coke fundamentals showed a tight trend, and coupled with strengthening cost support for coke, the coke market may hold up well in the short term, with the first round of coke price increases this week likely to be implemented.

This week, ferrous metals retreated after a rapid rise. At the beginning of the week, the market said that Asia had shifted to coal-fired power generation due to a natural gas supply deficit, while Indonesia would increase coal production and impose export taxes. The rise in international coal prices was transmitted to China, and coking coal and coke led the gains in ferrous metals; mid-week, the Middle East situation remained volatile, and the U.S. and Iran held differing attitudes toward war, with ferrous metals consolidating at high levels; the pullback in the second half of the week was also mainly due to the weakening of the cost-side logic, as market rumors said long-term iron ore contract negotiations had been completed, expectations for tightening iron ore supply declined, and raw materials turned into the main driver of the pullback. In the spot market, speculative trading and end-user purchase sentiment improved in the first half of the week, while rigid demand remained dominant in the second half, and the spot-futures price spread widened somewhat......

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.

[China Iron Ore Brief: Domestic Iron Ore Prices May Have Some Upside Room Next Week] This week, prices in China’s iron ore concentrates market showed mixed performance. By region, prices in Tangshan, Qian'an, Qianxi and other areas of Hebei were raised slightly by 1-5 yuan/mt; prices in Chaoyang, Beipiao, Jianping and other areas of western Liaoning remained relatively stable; east China also saw gains of 15-20 yuan/mt. Looking ahead to next week, domestic iron ore resources were still tight. Demand side, according to SMM