[July 6 Morning Briefing] The US added 57,000 nonfarm jobs in June, below market expectations of an increase of 110,000. The combined job gains for April and May were revised down by 74,000. The most-traded SHFE nickel 2609 contract surged to the 128,000 yuan/mt level in early trading before pulling back slightly, and by the end of the morning session it was reported at 127,190 yuan/mt, up 0.59%. The US nonfarm payrolls report came in surprisingly weak, leading the market to turn more cautious on the employment outlook. Expectations for US Fed interest rate hikes cooled markedly, and the US dollar fell sharply, providing a catalyst for a rebound in nickel prices. In the short term, nickel prices are expected to be in the doldrums in the 125,000-135,000 yuan/mt range.

This week, finished steel continued its gradual decline, while raw materials began to stabilize, with coking coal rebounding to some extent. During the week, rumors about a coal mine accident in Shanxi and customs clearance restrictions at the Mongolian border spread, boosting sentiment. Coupled with the China Mineral Resources talks, the raw materials side rebounded from lows. In the second half of the week, as rumors of maintenance at steel mills across various regions emerged, negative feedback expectations intensified somewhat, and raw materials pulled back. Approaching the weekend, however, the 10th round of coke price increases was initiated, pushing coking coal and coke futures higher. In the spot market, the off-season characteristics of end-users became increasingly evident, with the market restocking at low prices as needed. With spot prices remaining relatively firm, the spot-futures price spread continued to widen...

[SMM Analysis] Stainless Steel Costs and Prices Pull Back in Tandem, Steel Mill Profits Remain Basically Stable This week, stainless steel prices and production costs fell together, and steel mill profit margins remained basically stable. Based on 304 cold-rolled as the benchmark, the profit margin calculated with current raw materials was 2.07%, while that using inventory raw materials was 1.33%. Nickel-based raw material cost side, high-grade NPI prices showed a pullback trend this week. During the week, SHFE nickel and SS futures were in the doldrums overall. Although there were widespread expectations of tight supply for high-grade NPI and upstream smelters and traders maintained firm offers, stainless steel mills' production schedule expectations pulled back, leading to weaker demand, and coupled with the simultaneous decline in stainless steel prices, the industry's acceptance of high-priced supply was very limited, and market transactions remained sluggish. As of this Friday, high-grade NPI with mainstream grade of 10%-12% fell by 8 yuan per nickel unit, closing at 1,133 yuan per nickel unit. Stainless steel scrap market, stainless steel scrap prices pulled back slightly this week. The weak futures market transmitted downward to spot cargo, and combined with sluggish off-season demand and reduced steel mill production schedules, rigid demand weakened further. Although steel scrap had an economic advantage over NPI, providing floor support for prices, uncertainty over Indonesian policies kept the market in a wait-and-see stance. Under the weight of bearish fundamentals, short-term stainless steel scrap prices are expected to continue to be in the doldrums. As of this Friday, the mainstream 304 off-cuts price in the Shanghai region fell by 100 yuan/mt, with the latest quotation at approximately 10,400 yuan/mt. Chromium-based raw material cost side, high-carbon ferrochrome prices continued to edge down this week. High-carbon ferrochrome production remained high...

[SMM Stainless Steel Scrap Market Weekly Review] Futures Weakness Dragged Down Stainless Steel Scrap Prices; Off-Season Demand Slump Pressured Market This week, prices of 304 stainless steel scrap off-cuts in east China pulled back, with a quotation range of 10,350-10,450 yuan/mt; prices of the same specification stainless steel scrap in the Foshan area fell in tandem, with a price range of 10,200-10,500 yuan/mt. From the perspective of raw material production cost analysis, the current cost to produce stainless steel entirely using stainless steel scrap is about 14,520.18 yuan/mt, while the cost using high-grade NPI reaches 14,988.98 yuan/mt, with the two maintaining a favorable cost spread. Stainless steel scrap prices pulled back slightly this week. During the week, SS futures consolidated weakly, and the weak sentiment in the futures market transmitted to the spot market, driving stainless steel finished product spot prices to also pull back slightly; the decline in the substitute raw material high-grade NPI slowed down, reducing its drag on the market, but the overall atmosphere in the raw material market remained mediocre. Under the influence of the futures-spot linkage, stainless steel scrap prices edged down slightly in tandem. Overall, cost support is difficult to offset the bearish pressure from fundamentals. The market has now entered the traditional consumption off-season for stainless steel, with end-use demand lacking internal momentum, and the expected production schedules of stainless steel mills pulling back, directly leading to a simultaneous weakening of rigid demand for stainless steel scrap. Meanwhile, news about the supplementary quota for Indonesian nickel ore remains unresolved, and policy uncertainty in the industry chain has been rising, leaving the overall market sentiment cautious and wait-and-see. Although stainless steel scrap still maintains a decent economic advantage over high-grade NPI, providing bottom support for prices, under the dual pressures of weak futures and the off-season…

This week, ferrous metals fell continuously. During the week, there were many disturbances from unverified market rumors, but overall macro sentiment was weak, and expectations of rate hikes outside China continued to weigh on commodity sentiment. Earlier, rumors of a strike at BHP caused a slight rebound in iron ore; in the latter half of the week, Tangshan issued a notice on the "Tangshan Industrial Source Emission Reduction Plan for H2 2026," and combined with post-holiday inventory accumulation of the five major steel products, market sentiment was weak, and ferrous metals fell again. In the spot market, the off-season characteristics for end-users became more evident, market demand continued to weaken. While spot prices remained relatively firm, the spot-futures price spread widened somewhat, and positions in both futures and spot markets were unwound. Transactions were concluded at prices below market levels, further dragging down market prices......

[SMM Stainless Steel Scrap Market Weekly Review] Finished Products Decline Drives Down Stainless Steel Scrap Prices; Cost Advantages Fail to Offset Off-Season Pessimism This week, the price of 304 stainless steel scrap off-cuts in east China pulled back, with a quotation range of 10,450-10,550 yuan/mt; the same specification stainless steel scrap prices in Foshan also pulled back, with a price range of 10,350-10,650 yuan/mt. Analyzing production costs from the raw material side, the cost of producing stainless steel entirely with stainless steel scrap is currently about 14,640.79 yuan/mt, while the cost using high-grade NPI reaches 15,072.29 yuan/mt, with the two still maintaining a favorable cost spread. This week, stainless steel scrap prices pulled back. During the week, SS stainless steel futures and SHFE nickel futures both pulled back, with bearish sentiment in the futures continuing to ferment. The bearish trend spread to the spot market, dragging down spot prices of stainless steel finished products. At the same time, the alternative raw material high-grade NPI prices also weakened, forming a linkage of declines across futures, finished products, and alternative raw materials, which directly dragged down stainless steel scrap prices this week. Overall, cost support is difficult to offset multiple bearish pressures. The market is currently in the traditional stainless steel consumption off-season, with end-use demand itself weak. Coupled with macro uncertainties such as warming expectations for US Fed interest rate hikes, overall market sentiment is relatively pessimistic, and downward pressure on raw material prices continues to increase. Meanwhile, recent news of stainless steel mill production cuts and maintenance has emerged frequently, further lowering market expectations for stainless steel scrap demand. Although stainless steel scrap still maintains good economic advantages compared with high-grade NPI, providing some bottom support...

[SMM Daily Review: Nickel Plate SHFE/LME Price Ratio Advantage Prominent; NPI Market Trading Continues to Weaken] June 26 news, SMM high-grade NPI upstream sentiment factor stood at 2.52, down 0.07 MoM, while the downstream sentiment factor was 1.83, down 0.03 MoM.

I. Both Rebar and HRC Profits Plunged in June Since mid-to-late May, steel prices have trended lower amid weakening downstream transactions as the off-season set in. From June to date, SMM spot prices for rebar, hot-rolled coil (HRC), and cold-rolled plate in east China fell by 1.5% to 2% from May levels. On the cost side, in June, the average of the 61% Fe port spot index fell 6.7% from May, while coke prices surged, with spot market prices up nearly 10% from May. Ore prices declined but coke prices strengthened, and steel scrap prices moved sideways. This resulted in average steel mill costs in June edging down only 0.1%–0.3% from May, while steel prices dropped far more than raw material costs, causing steel mill profits to narrow sharply. According to SMM data, as of June 25, profits at blast furnace steel mills in east China for rebar, HRC, and cold-rolled products all declined by varying degrees from their early-May peaks. Rebar mt profit dropped from 35 yuan to -80 yuan, down 328%; HRC mt profit fell from 232 yuan to 70 yuan, down 70%; and cold-rolled mt profit slipped from 192 yuan to 100 yuan, down around 48%. Figure 1 – Profit Trends of Blast Furnace Steel Mills in East China During this rapid profit contraction, the cost composition of pig iron shifted: the share of iron ore costs fell from 56% to 53%, the share of coke costs rose from 30% to 33%, while the share of PCI coal and other costs changed relatively little. Rising coke prices squeezed steel mill profit margins. II. Profit Outlook In the short term, on the steel side, end-use demand will be limited during the off-season, and inventories will gradually build up from July. Steel’s own fundamentals are unlikely to support price strength. On the cost side, ore prices are expected to remain under pressure as the market anticipates that maintenance impacts at some regional steel mills could widen. For coke, spot prices still have a chance of seeing a ninth round of increases take effect. Overall, steel mill profits are expected to have some further room to narrow in the near term.

[SMM Stainless Steel Daily Review] SS Futures Extended Decline, Stainless Steel Spot Followed Lower with Sluggish Trading According to SMM on June 25, SS futures extended their decline and weakened. Non-ferrous metals futures continued their downtrend, and combined with the impact of yesterday’s Indonesian nickel ore quota news, SS futures fell further. As of the midday close, the most-traded SS contract settled at 14,640 yuan/mt. In the spot market, pressured by the ongoing decline in futures and the arrival of the traditional consumption off-season, the sluggish trading situation was hard to reverse, and traders showed a strong willingness to sell. Although a mainstream stainless steel mill kept its guidance price unchanged in the morning, spot quotes still fell along with futures, and trading remained sluggish. The most-traded SS futures contract. At 10:15 AM, SS2608 was reported at 14,600 yuan/mt, down 140 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the 370-970 yuan/mt range. In the spot market, the average price of cold-rolled 201/2B coil remained flat; cold-rolled 304/2B coil with mill edge saw its average price fall by 50 yuan/mt in Wuxi and 50 yuan/mt in Foshan; cold-rolled 316L/2B coil in Wuxi dropped by 100 yuan/mt; hot-rolled 316L/NO.1 coil in Wuxi fell by 50 yuan/mt; cold-rolled 430/2B coil in both Wuxi and Foshan held steady. This week, stainless steel futures and spot swung wildly. Macro expectations outside China repeatedly disrupted the futures, intensifying the tug-of-war between longs and shorts in the market. Overall, the pattern was one of macros driving futures trends, trading fluctuating with sentiment, supply tightening supporting spot, inventory remaining stable, and profits seeing a minor recovery...

[SMM Stainless Steel Daily Report] SS Futures Decline Consecutively; Spot Stainless Steel Traders Sell Actively at a Discount to Boost Shipments According to SMM on June 24, SS futures continued to trend lower and weaken. Nonferrous metals futures extended their decline, with SS moving down in tandem. Near the close, news emerged that Indonesia might raise its RKAB nickel ore quota, causing SHFE nickel and SS to pull back further. As of the close, the most-traded SS futures contract settled at 14,720 yuan/mt. In the spot market, affected by the consecutive decline in SS futures, market sentiment was generally weak. To reduce their own inventories, spot traders had a strong willingness to sell, and selling at a discount became more frequent. Stainless steel spot quotes declined accordingly, but the sluggish trading remained hard to change. For the most-traded SS futures contract, at 10:15 a.m., SS2608 was quoted at 14,740 yuan/mt, down 190 yuan/mt from the previous trading day. Spot premiums for 304/2B in Wuxi were in the range of 330-830 yuan/mt. In the spot market, cold-rolled 201/2B coil average price in Wuxi remained unchanged; for cold-rolled 304/2B coil with rough edges, the average price in Wuxi fell by 50 yuan/mt and in Foshan by 25 yuan/mt; the price of cold-rolled 316L/2B coil in Wuxi dropped by 100 yuan/mt; hot-rolled 316L/NO.1 coil in Wuxi was quoted unchanged; cold-rolled 430/2B coils in both Wuxi and Foshan fell by 50 yuan/mt. This week, stainless steel futures and spot prices experienced wild swings, as macro expectations outside China repeatedly disturbed the futures, intensifying the tug-of-war between longs and shorts in the market. Overall, the futures trend was dominated by macro factors, trading fluctuated with sentiment, and supply...